Peter Cooper : UK Web 2.0 and Ruby on Rails consultant
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How to make $1 million on the national average salary

The average salary in the US in 2002 was $36,764. We will assuming an average raise of 3.5% per annum (raises are usually about 1% above inflation) and an inflation rate of 2.5%. We will also assume net income is 70% of gross, at $25734.80 per year.

A fictional 'average' worker saves 20% of his income from age 25 to age 65 and spreads the savings amongst property, shares, and cash with an average return of 7% per annum. The resulting balance is approximately $1.7 million. Hurrah, he's an average wage millionaire! (Of course, once we take inflation into account, 2.5% of inflation per year over 40 years crushes his hoard into $645,000 of value.)

October 26, 2006 | Posted by peter | Comments (0)

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