He Average salary in 2023which is the one we have available for the INE, ascended to 28,049.94 euros gross. If we save during our working life – about 40 years – 20% of what we earn, you will see what the data tell us.
First of all, say that not everything is perfect. For example, part of the savings made by the Spaniards goes to the house. And that is not taken into account. In fact, savings capacity is low, but it is not to cry.
Source: Carlos Arenas Laorga
But it is also true that I hope Your salary increases over the years And you can have more than an average salary. I also imagine that you can save for your children, but I also suppose you will inherit something at a certain time. As usual, We talk about averages. Everyone has our situation.
Total, returning to the data. Yeah You save that 20%, We are talking about 467,499 euros per month.
Well, we assume that You invest them throughout your working life (40 years) in a global index or in S&P 500, the largest index, You would be a millionaire In your retirement. I repeat, millionaire.
The S&P 500 has had average profitability in the last 90 years, 11.24%. Therefore, your contributions would be 224 thousand euros, but you would end …
Source: Carlos Arenas Laorga
Yeah, 3.7 million euros (€ 3,695,946.22). Of which, practically everything is surplus value.
You may think that I have chosen the best index, but the MSCI World has given more than 9%. With what we are not talking about impossible figures. Not much less.
What does affect is inflation. Yes indeed. Profitability discounting inflation, that is, already net or, so to speak, the purchasing capacity of those euros is lower. We are going to a more modest 7.42%. With this figure, already net, the amount is 1.3 million. For being concrete, 1,298,263.67. It is quite minor, but it is the real capacity of those euros discounting the inflation of the 40 years. It is not bad either. You are still a millionaire.
Where is the trap? We have taken the profitability given by the largest index in the world, not very distant from a MSCI World. We have selected an average salary according to the INE … because it is that There is no. The only trap is the taxes and savings that are destined for housing, a type of asset that does not report benefits in monetary units. It gives it to have a roof in property, which is not bad either.
Here comes the classic question of Why doesn’t everyone do it if it’s so simple. First of all is because not everyone reads investment strategies. You understand me: By financial ignorance. Ignorance is the great enemy. And the second reason is because the Culture of immediacy It is very strong. People also want to have a tablet and know what to do and almost nobody has it. It’s easy: you have to eat less and do more sports. But the fact is that everyone envies it and few have to have it.
The Financial Education It is not taught in schools. Young people suffer from this ignorance. And adults are already late. At most, young people know brick savings and deposits. To the OECD data on financial education I refer.
And others who have basic knowledge and want to save, leave it for laziness and neglect. I prefer a whim now. Like the one who wants the beer and the healthy Torreznos and then wants the tablet in the gut. In the end it ends up being the tablet, but the chocolate.
As they said in Kung Fu Panda, the secret is that there is no secret. Time and compound interest.
Save a fixed amount every month. Invié it in a diversified portfolio that reinvested the benefits. And patiencea lot of patience. Sleep with a vision of decade, not days.
It is a true revolution that can begin with a decision as simple as automated. As September is the month of purposes, I hope not to be late and that you are in time to make the only one that surely makes you a millionaire.