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They should simply have been born a couple years earlier and gotten luckier; given that they haven't done either of those things by Working Hard (tm), they should instead fucking die.
For real though, I think all they can do is not waste money on things like new cloths, meat, restaurants, child care, medical expenses, any food that costs more than 3$ a pound, getting their car fixed, having hot water, etc etc. They must learn how to make everything, fix everything, where to buy everything cheaply, and live a buddha like existence of self denial until they reach escape velocity, which they probably will never reach.
If you want to get out of the low income section of the economy, it isn't enough to work hard and smart, you have to also be lucky and have the knowledge that it's all zero sum until you get about 75,000 in free, un-earmarked cash in the bank. If you can't buy yourself a decent car in cash RIGHT NOW / you don't have at least 1 entire years worth of housing lined up, either by owning or having the rent to hand, you are still poor.
This is why I think I should be taxed way harder; I make more money from having money than I ever did doing productive labor.
If you don't have the income you can't save yourself rich. Contrariwise, if you do, you don't need $75,000 or anything to not be poor -- though you CAN spend yourself poor at any income.
Income comes and goes, is the thing. Your income is never guaranteed, credit is an illusion of the false world which will disappear when you need it most, and expenses can scale infinitly.
I would say if everything you 'own' is leveraged and you are reallying on income/returns/debt to finance your life in exchange for having more exposure to the market; you are trading security for potential profit, and the thing that makes you not poor is security, not some arbitrary number.
75k in the bank + a decent income is a good level of security, enough to feel like you are no longer poor. That is ONE car blowing up and ONE roof blowing off and ONE leg getting broken without the need to sell the farm.
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I know you mean this as snark, but also this, unironically.
To benchmark - I currently have enough in tax advantaged accounts that I can retire comfortably at 65 even with a great depression-scale market correction in between now and then, and depending on how things go, I might be able to retire in as little as two years.
I was born into a poor family. I grew up so poor that I got in trouble at school more than once for not wearing shoes because my existing pair fell apart and we couldn't afford new ones. Even food wasn't a guarantee.
I managed to get from there to where I am now by pretty much doing what you described above. I worked 15-20 hours a week all through high school. I smoked the SATs, which got me accepted into several different schools. I chose to go to a fairly pedestrian state school rather than a prestigious engineering college because they offered a much larger aid package. I chose a major that wasn't my passion because I estimated that it would represent my best chance at not being poor. I learned how to cook my own meals and fix my own car.
When I graduated, I took a job at a relatively "safe" employer and I've been there for over 20 years. I kept my head down during the global financial crisis and did what I could to be at the bottom of the layoff pile. For the first three years I worked, I lived like a monk in a busted-up apartment that didn't even have hot water half the time. I used every spare penny I had to pay off my student debts.
Once I paid off my debts, I started putting 15% of my income into a 401(k) and maxing out a Roth IRA. It meant that I couldn't afford a nice car and I wasn't going to go on a vacation every year, but starting early meant that my gains had a chance to compound.
Even today I try to live simply. I try to keep my entertainment cheap. I don't take extravagant trips. I only have beef a handful of times a year because it's expensive. I live in a low cost of living area and have kept the same small, simple house for the last fifteen years.
I did what you suggested above, and it's working pretty well.
It was snark but also real for me as well.
I did my own cooking, plumbing, car repair, everything; and if I couldn't do it myself it simply didn't get done. Can't fix the water heater? Simply take cold showers, you won't die.
I just think that isn't sufficient; you also need to get lucky.
That said like you, have that shit baked in. I have the same old 99 camry I bought when I had no choice, and I can't bring myself to get rid of it until it finally dies. I do have the hybrid second car because there are two people who need cars, so that softens the urgency.
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do you see 75k as "you now have enough money to avoid living wildly inefficiently, you can now start putting the extra into the market" or as "if you've already saved up to this point, 75k compounding with everything in VTI will keep you safe for the rest of your life. even if you're incapable of picking stocks"
A combo. The efficiencies that come from never paying interest, always being able to wait for your moment, having money to cover whatever happens when it happens instead of letting it become more expensive with time add up.
On top of that, once you get to a big floating cash pile, you have developed the mental habits that help you not lose it.
Also Also, the missing stress from knowing that if three big problems happen back to back you won't be on the street is worth any amount of money. You don't know the weight of that monkey till he's finally off your back.
Blessed is he who can avoid lifestyle inflation
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