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I've never understood the logic behind the idea of a "nest egg". Years ago, perhaps, it might not have been clear to the average person that money has to grow o

I've never understood the logic behind the idea of a "nest egg". Years ago, perhaps, it might not have been clear to the average person that money has to grow over time to stave off inflation, but that information has been widely available for decades and many people still don't put money into any kind of investment. Not judging anyone. Circumstances are different for each and every person, and financial literacy isn't universal. But I am genuinely curious as to how such a large number of people that have/had careers that paid ok end up paycheck to paycheck when retirement comes around.

liveoneggs 15d ago
Look around in any parking lot or stop light. Check out some real estate listings near you. Notice the number of deliveries going out at your local restaurants.
pllbnk 15d ago
If everybody is rich, then no one is rich. In other words, if everyone has a lot of money, then the prices will be high enough to suck this money out of everyone. America, and now much of the Western world, runs on debt and taking on debt is being instilled from the early years, so no wonder why people can't save when their income is spent on interest payments. We know empirically that lower wealth inequality works because in the past periods with lower wealth inequality societies lived more secure lives financially, so wealth redistribution is the answer.
- Danox 15d ago
  A tale of two cities both had access to the North Sea oil wealth one spent like a drunken sailor, the other side set up a sovereign fund guess who was doing better today. (and no population size has nothing to do with doing the right thing). Britain has a ton of excuses after 60 years. And the point is to save and live within your means you can’t sit around and worry about what if the right thing to do is to save and live within your means you don’t sit around and worry about if everybody’s rich then no one‘s rich that sounds like an excuse not to do anything. Many people who I worked with always had an excuse there’s no point saving or living within your means because inflation is gonna kill you or you’re going to be taxed.
m463 15d ago
I know lots of folks (male and female) who would have retired fine, but for one word: divorce.
ozim 15d ago
It gets worse when you read financial "social media" people repeating BS like "high yield savings account" there is no such thing as long as I am alive, it is something from maybe 80's or 90's or even earlier. My cousin had the idea of "just put some money in savings account each month and never check it" - that's exactly super outdated advice or a crooked one where someone doesn't know anything about ETFs and heard you put money each month in it and forget... There is whole LARP scene of FIRE and influential bloggers from that scene are the only ones that are making money. Nest egg I do believe had merit back when there actually were "high yield savings accounts" available. I basically see who is LARPing money management when I see they post about FIRE or HYSA, well "money market accounts" seem better and kind of like of HYSA, but the hell those are not really that easily available. Government bonds are also rather interesting for keeping as "nest egg", corporate bonds are useless. Article author seems to be from quite well off family lamenting he just didn't understood any of financial stuff and world moved on while he ate away whatever he had. Sad part is it can happen to any of us even if we are financially literate because market can be bad far longer than we can afford or like retirement, jobs all of this can shift while we are left with much less for day to day. Part that I don't understand is that, we should expect that outcome rather than be surprised by it. We should be surprised when all went well and there was no recession, layoffs during our lives.
- cagey 15d ago
  [Speaking as a US citizen] > ... BS like "high yield savings account" there is no such thing as long as I am alive ... HYSA are in 2026 readily available. > ... well "money market accounts" seem better and kind of like of HYSA, but the hell those are not really that easily available. Likewise readily available: open a free brokerage (or "cash management") account at Fidelity.com online (it is easy and acts similar to a bank account: your paycheck can be direct deposited there, it offers a billpay service, you can use it for electronic transfers, and outgoing wire transfers are free; no minimum balance and no monthly fees), cash by default goes into their SPAXX money market account (its 0.42% ER (Expense Ratio) is higher than some, but its 3.33% yield beats most savings/credit union savings rates; EX: Ally bank is yielding 3.00% these days). If you want more of the yield to go into your pocket you can buy (with no transaction fee) a ETF like Vanguard's VBIL which invests only in short duration US Treasury bills (now yielding 3.63% w/ER 0.06%). And if you're up for slightly higher effort, you can buy T-Bills directly at Fidelity with auto reinvestment, at no extra cost. The preceding (including HYSA) are all near-zero risk, and as a consequence, do NOT pay truly "high" yields (which I think was your real point), they just pay yields that are at the upper end of 'near-zero risk'. These are NOT where you invest for long-term gain/appreciation. For the latter, conventional wisdom says: invest in the stock market, where the risk is much higher, but the historical long-term return is too. ETF's make this easy and efficient. One candidate for "fire and forget": VTI, Vanguard's Total [US] Stock Market Index ETF (as before, with an easy to open account at Fidelity, you can trade these for almost no cost; Fidelity has many competitors, I am merely a happy customer of theirs).
AlotOfReading 15d ago
It's pretty easy to see how it happens. People don't intuitively understand compound interest and defer. You're supposed to start saving during the most financially constrained portion of your life, and those are the dollars that have the most impact on your nest egg. Imagine someone starts investing $100/mo at 20 for 3% annually. Their friend who starts saving the same amount at 30 will have 30% more money, despite putting in almost as much. A person whose parents gave them $10k for retirement at 20 and only starts investing at 30 will have as much as the person who invested religiously from 20, while a person who managed both will have double.
- jghn 15d ago
  It's not always that simple. I was deep in debt for most of my 20s & 30s, and the interest rate on that debt was higher than I'd have gotten by socking it away. While somewhat avoidable in retrospect, I don't believe my story is uncommon.
Danox 15d ago
Humans in general are short-term thinkers if you can put it off until tomorrow most will elect to do so. Personal finance classes should be required classes the first year of high school and all the way through the senior year. Most want the instant lottery win when you tell them they have to save and live within their means over time, eyes just glaze over and it doesn’t happen. I also have given up trying to advise people to do differently in my life. They won’t learn/listen until they get to 50-55 before they start to realize that time has run out. Unless you were born with a silver spoon, the treadmill starts when you turn 18. when you are young compounding interest/stock splits/dividends/blue chip stocks/401k/unions are your friend. I was never in a Union, but in my profession, the pipe fitters who worked in the field at my company were, and their healthcare and their pensions, and their savings at the end of life were very very good. It’s too bad. A large part of the country are anti-Union in fact, many people in the union were very conservative and didn’t quite realize how lucky they were to be in a Union.
throw0101d 15d ago
> Years ago, perhaps, it might not have been clear to the average person that money has to grow over time to stave off inflation, but that information has been widely available for decades and many people still don't put money into any kind of investment. When the CPP was being reformed in the 1990s: * https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_refor... There was a lot of debate about whether it should still be government run, or left to individuals, and it is exactly this situation that many folks said that there needs to be some component of retirement that should not be able to be touched by individuals.

liveoneggs 15d ago

Look around in any parking lot or stop light. Check out some real estate listings near you. Notice the number of deliveries going out at your local restaurants.

pllbnk 15d ago

If everybody is rich, then no one is rich. In other words, if everyone has a lot of money, then the prices will be high enough to suck this money out of everyone. America, and now much of the Western world, runs on debt and taking on debt is being instilled from the early years, so no wonder why people can't save when their income is spent on interest payments. We know empirically that lower wealth inequality works because in the past periods with lower wealth inequality societies lived more secure lives financially, so wealth redistribution is the answer.

Danox 15d ago
A tale of two cities both had access to the North Sea oil wealth one spent like a drunken sailor, the other side set up a sovereign fund guess who was doing better today. (and no population size has nothing to do with doing the right thing). Britain has a ton of excuses after 60 years. And the point is to save and live within your means you can’t sit around and worry about what if the right thing to do is to save and live within your means you don’t sit around and worry about if everybody’s rich then no one‘s rich that sounds like an excuse not to do anything. Many people who I worked with always had an excuse there’s no point saving or living within your means because inflation is gonna kill you or you’re going to be taxed.

m463 15d ago

I know lots of folks (male and female) who would have retired fine, but for one word: divorce.

ozim 15d ago

It gets worse when you read financial "social media" people repeating BS like "high yield savings account" there is no such thing as long as I am alive, it is something from maybe 80's or 90's or even earlier. My cousin had the idea of "just put some money in savings account each month and never check it" - that's exactly super outdated advice or a crooked one where someone doesn't know anything about ETFs and heard you put money each month in it and forget... There is whole LARP scene of FIRE and influential bloggers from that scene are the only ones that are making money. Nest egg I do believe had merit back when there actually were "high yield savings accounts" available. I basically see who is LARPing money management when I see they post about FIRE or HYSA, well "money market accounts" seem better and kind of like of HYSA, but the hell those are not really that easily available. Government bonds are also rather interesting for keeping as "nest egg", corporate bonds are useless. Article author seems to be from quite well off family lamenting he just didn't understood any of financial stuff and world moved on while he ate away whatever he had. Sad part is it can happen to any of us even if we are financially literate because market can be bad far longer than we can afford or like retirement, jobs all of this can shift while we are left with much less for day to day. Part that I don't understand is that, we should expect that outcome rather than be surprised by it. We should be surprised when all went well and there was no recession, layoffs during our lives.

cagey 15d ago
[Speaking as a US citizen] > ... BS like "high yield savings account" there is no such thing as long as I am alive ... HYSA are in 2026 readily available. > ... well "money market accounts" seem better and kind of like of HYSA, but the hell those are not really that easily available. Likewise readily available: open a free brokerage (or "cash management") account at Fidelity.com online (it is easy and acts similar to a bank account: your paycheck can be direct deposited there, it offers a billpay service, you can use it for electronic transfers, and outgoing wire transfers are free; no minimum balance and no monthly fees), cash by default goes into their SPAXX money market account (its 0.42% ER (Expense Ratio) is higher than some, but its 3.33% yield beats most savings/credit union savings rates; EX: Ally bank is yielding 3.00% these days). If you want more of the yield to go into your pocket you can buy (with no transaction fee) a ETF like Vanguard's VBIL which invests only in short duration US Treasury bills (now yielding 3.63% w/ER 0.06%). And if you're up for slightly higher effort, you can buy T-Bills directly at Fidelity with auto reinvestment, at no extra cost. The preceding (including HYSA) are all near-zero risk, and as a consequence, do NOT pay truly "high" yields (which I think was your real point), they just pay yields that are at the upper end of 'near-zero risk'. These are NOT where you invest for long-term gain/appreciation. For the latter, conventional wisdom says: invest in the stock market, where the risk is much higher, but the historical long-term return is too. ETF's make this easy and efficient. One candidate for "fire and forget": VTI, Vanguard's Total [US] Stock Market Index ETF (as before, with an easy to open account at Fidelity, you can trade these for almost no cost; Fidelity has many competitors, I am merely a happy customer of theirs).

AlotOfReading 15d ago

It's pretty easy to see how it happens. People don't intuitively understand compound interest and defer. You're supposed to start saving during the most financially constrained portion of your life, and those are the dollars that have the most impact on your nest egg. Imagine someone starts investing $100/mo at 20 for 3% annually. Their friend who starts saving the same amount at 30 will have 30% more money, despite putting in almost as much. A person whose parents gave them $10k for retirement at 20 and only starts investing at 30 will have as much as the person who invested religiously from 20, while a person who managed both will have double.

jghn 15d ago
It's not always that simple. I was deep in debt for most of my 20s & 30s, and the interest rate on that debt was higher than I'd have gotten by socking it away. While somewhat avoidable in retrospect, I don't believe my story is uncommon.

Danox 15d ago

Humans in general are short-term thinkers if you can put it off until tomorrow most will elect to do so. Personal finance classes should be required classes the first year of high school and all the way through the senior year. Most want the instant lottery win when you tell them they have to save and live within their means over time, eyes just glaze over and it doesn’t happen. I also have given up trying to advise people to do differently in my life. They won’t learn/listen until they get to 50-55 before they start to realize that time has run out. Unless you were born with a silver spoon, the treadmill starts when you turn 18. when you are young compounding interest/stock splits/dividends/blue chip stocks/401k/unions are your friend. I was never in a Union, but in my profession, the pipe fitters who worked in the field at my company were, and their healthcare and their pensions, and their savings at the end of life were very very good. It’s too bad. A large part of the country are anti-Union in fact, many people in the union were very conservative and didn’t quite realize how lucky they were to be in a Union.

throw0101d 15d ago

> Years ago, perhaps, it might not have been clear to the average person that money has to grow over time to stave off inflation, but that information has been widely available for decades and many people still don't put money into any kind of investment. When the CPP was being reformed in the 1990s: * https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1998_refor... There was a lot of debate about whether it should still be government run, or left to individuals, and it is exactly this situation that many folks said that there needs to be some component of retirement that should not be able to be touched by individuals.