John is born in 1945 after the most deadly war in history has already ended.
In the 1960s, in his late teenage years, he gets a minimum wage job paying $1.15 per hour ($11.55 in inflation adjusted dollars today)
John, being as smart as he is, decides to contribute to social security. A few years later, he decides he wants to pursue a career as an engineer - absolutely!
Average tuition for public colleges at the time is only $243 per year (~$2,500 in today’s dollars).
He gets a job in high school at his local ice cream store. He then uses the money to slowly pay for college over time.
In the mid 1960s, Medicare is created - resulting in a massive cushion for John’s healthcare costs. John finishes college and works for a few years as an engineer, making pretty decent money.
Within 4 years of saving, he purchases a home for ~$25,000 (~$210K in inflation adjusted dollars).
Relatively to his annual income, this is only 2.0x his annual salary! Not a problem at all.
Throughout the rest of his working years, John remains financially savvy and invests away a portion of his paycheck.
The invention of the 401K and IRA in the 70s and 90s paves his path for massive tax-savings in his portfolio.
By 2008, John has built up a massive nest egg of cash and stock investments, alongside his personal residence.
As the Great Financial Crisis hits, John takes full advantage and purchases an additional home as an investment property.
Enter quantitative easing.
For the next decade, the Federal Reserve continues to lower interest rates and stimulate economic activity.
John’s stock and real estate investment portfolio skyrockets. On top of that, the home he bought back in the 1960s has nearly 15x since that time.
John comfortably retires as he watches the next generation live in an economy tarnished by inflation and wealth inequality.
He thinks to himself: “it must be because these kids didn’t make their coffees at home”.
In the 1960s, in his late teenage years, he gets a minimum wage job paying $1.15 per hour ($11.55 in inflation adjusted dollars today)
John, being as smart as he is, decides to contribute to social security. A few years later, he decides he wants to pursue a career as an engineer - absolutely!
Average tuition for public colleges at the time is only $243 per year (~$2,500 in today’s dollars).
He gets a job in high school at his local ice cream store. He then uses the money to slowly pay for college over time.
In the mid 1960s, Medicare is created - resulting in a massive cushion for John’s healthcare costs. John finishes college and works for a few years as an engineer, making pretty decent money.
Within 4 years of saving, he purchases a home for ~$25,000 (~$210K in inflation adjusted dollars).
Relatively to his annual income, this is only 2.0x his annual salary! Not a problem at all.
Throughout the rest of his working years, John remains financially savvy and invests away a portion of his paycheck.
The invention of the 401K and IRA in the 70s and 90s paves his path for massive tax-savings in his portfolio.
By 2008, John has built up a massive nest egg of cash and stock investments, alongside his personal residence.
As the Great Financial Crisis hits, John takes full advantage and purchases an additional home as an investment property.
Enter quantitative easing.
For the next decade, the Federal Reserve continues to lower interest rates and stimulate economic activity.
John’s stock and real estate investment portfolio skyrockets. On top of that, the home he bought back in the 1960s has nearly 15x since that time.
John comfortably retires as he watches the next generation live in an economy tarnished by inflation and wealth inequality.
He thinks to himself: “it must be because these kids didn’t make their coffees at home”.
