It's become perverted in recent years by high salaried hyper consumers who have started idealizing "fatFIRE", which is really only achievable by a small group of people.
I've worked with some very intelligent, brilliant people, who simply cannot comprehend how their own financial spending is foolish, or more likely, know this and choose to play ignorance. I've always found it fairly bizarre, almost like an addiction. It's fascinating how some people can be so skilled in one domain, but so lacking in self-control, especially when obtaining said skill requires enormous self-control in the first place.
And beyond that, so many of my peers hit the ground running on the hedonic treadmill right out of college, quickly filling up their consumption habits to meet their newly high income, while I continued to live low and plow huge amounts of my paycheck into my investments. Well, they're all still slaving away with no end in sight and I'm financially independent after many lucky breaks in my early investments that wouldn't have happened if I didn't have such a frugal mindset early on.
It seemed so obvious to me that this would be the outcome. I still don't understand how so many people can't seem to grok how much early sacrifice can yield outsized reward down the line.
- Separate investing and frugality/budgeting. I guess a lot of those people do actually one of those, but not the other.
- You talk about high earners/engineers. In most of they earning life they never knew the need to ration, or lacking funds - so with the trajectory they see in early adulthood, especially if they like what they do, and they're successful, there simply isn't any recognizeable need to save for later (or even retire early)
- Maybe you like dealing with money, watching stock news early in the morning - I hate it. I hate the thought of dealing with this. It's an active aversion. Of course, the majority of investments should be "set and forget", but it's not always apparent how (especially outside US) and you need quite some research beforehand.
- Coupled with this, you put your life savings in a thing that you don't understand, won't follow. There may be a not entirely unfounded fear of South Park's "aaaand it's gone"
- There is something absolutely tempting about money sitting directly available on an account. Especially when you're young and single, you have no idea what happens with you next year, or what you will probably spend on. Walling away your funds is a critical and worrysome thought.
Sure, you can sum this all up as "financial illiteracy", but they are still cemented in valid concerns or life experiences, instead of mere negligence.
I really wish things like annuities or pensions were available for the 21st century economy. So many people don't want to deal with investing and understanding markets (which change!) and avoid making smart decisions.
There should be a way to just put money in a magic box that pays a little bit back each year, and every time you put money in it grows a bit more.
Yeah that is what I mean, what happens when the stock market drops 75% over 25 years? Not much compounding happening. https://finance.yahoo.com/quote/%5EN225?p=%5EN225
A quick check here, https://www.portfoliovisualizer.com/backtest-portfolio, with JPXN between 2002-2021 investing a static amount monthly and reinvesting dividends suggests you would have doubled your money over the period.
Bad compared to US growth to be sure. You're right that Japan is a great example of how this strategy doesn't work as well for people locked in to stagnating economies.
that's why you don't invest in a single region. A globally diversified portfolio (which, to be fair, is more difficult to achieve for people in some nations that's not the west) is what's required to get the market returns.
You, on the other hand, are not including inflation...
Retirement always was and will continue to be a risk that depends both on how much you've saved and how well the economy will continue to function and grow once you're no longer working. Like all things in life, nothing is certain.