Thursday 22 February 2018

If you're not rich by 45, you probably never will be

And yet... It would be nice to be rich, wouldn't it?
And yet... It would be nice to be rich, wouldn't it?

Adam Boult

There is more to life than money.

A lifetime spent chasing filthy lucre at the expense of what really matters (family, friendship, a sense of purpose and belonging) will surely lead to misery.

And yet... It would be nice to be rich, wouldn't it? To be able to live where you want, have every material comfort you can imagine while never have to worry about money - well, what's not to like about that?

Unfortunately, the vast majority of us will never be truly affluent - and, according to a 2015 US study by Federal Reserve researchers resurfaced this week by Slate and Business Insider, if you're not wealthy by the age of 45, it's extremely unlikely you ever will be.

The researchers studied Social Security Administration data from 1978 onwards, looking at how men's earnings evolve over time.

They found that, for the average male worker in the US, "the bulk of earnings growth happens during the first decade" of their working life - typically between the ages of 25 and 35.

Men can expect to see smaller growth in earnings from around 35 onwards - and then, after the age of around 45, earnings will typically stagnate or decline, particularly for those already in lower-earning brackets.

Writing in 2015, the Washington Post's Danielle Paquette commented: "Unless you plan to become Zuckerberg-ian wealthy, the lesson is clear: Chase the proverbial carrot while you're young. Save your money while it’s coming in. Or ask for that raise - sooner, rather than later."

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