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Comment by RhysU | Hacker News Reader

> ...what do you think they would materially gain from it?

$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.

So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.

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1.6m in 40 years probably won’t move the needle much more than 100k does today. Besides that, we’re not trying to solve peoples distant retirements we’re trying to solve peoples lives today , or that’s how I interpret the article

100K at 7% (market rate adjusted for inflation) is 1.6M after 40 years, so that would be 1.6M in today's buying power. Pretty good by the vast majority of peoples' standards.

What happens to stock market when everyone is given 100k to invest? The inflation adjustment is likely understated as you’re basing on historical factors and this is large macro shock to the system that needs to be adjusted for as well.

I also still don’t think this helps most people during the bulk of their lives. Most people in this cohort don’t save now, having knowledge of a more secure retirement wouldn’t change much for them. It’s not like they can turn off 401k contributions and have extra pocket money today.

This probably seems very relevant to you if you're elderly and not so relevant if you don't have a home.

It's only relevant if you are young. The elderly don't have the 40 years.

† Of course, that is assuming over the 40 years that politician and corporations don't try to screw people out of their investments.

This is exactly the wrong thing for a 20yr old to do with 100k. (Assuming they have no other assets) When I was 20 I needed a reliable car (having an unreliable car subjected me to periodic unplanned multi thousand dollar shocks), buying books for school (individual stem textbooks cost a couple hundred bucks) Yes I should have started an investment account but given my other finances I should have been putting in modest amounts every month, but frankly when daily life is costing more than you make it doesn’t make sense to earn 8% while incurring debt that costs 15%. I’d say the trick is stability. The uncertainties of young life with no money cause things to cost more than they should.

If my children had a $100K windfall this is precisely what I would tell them to do assuming they had an emergency fund and no debt. If not, I would tell them to create an emergency fund, pay off reasonable debt, and then to invest the rest for 40 years.

Read and internalize https://www.bogleheads.org/wiki/Prioritizing_investments. It is simple. It is immensely useful.

So for 44 years of their life it won't help them at all.

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