Its important to have a spouse who has a similar desire for sensible frugality. The level of income is less important than simply living below your means for your whole life. With prudent financial planning, compound interest and the passage of time achieves the level of wealth described in the article. Indeed car purchases are a good indicator. An omission of the article is that often frugal persons are generous to…
Compound interest? Where? The interest rates are such that inflation would destroy whatever gain you have. Nearly all savings accounts are paying an annual yield of less than 1%! That means WITH compounding, you're looking at a 1% or lower gain. Inflation is typically between 1-4%, with 2% being the benchmark in terms of financial planning, though admittedly in April, we had slightly negative inflation, but that tren…
However, your tax assumptions are probably too high for the current environment. If you earn 100k gross, but max out your 401k and HSA, your net income after taxes will be close to 60k, but you'll already be saving 20k+ pre-tax.
Yes, you'll have to pay taxes on the 401k when you reach retirement, but if you're living frugally and only taking out a small amount, your tax obligations will be way less than 35%. Without breaking a sweat, my effective tax rate is under 16% and I'm in the range described.