Comment by NoLinkToMe

I don't agree with this. Spend less than you earn is a big part, for sure. Without it, you'll never really get very far.

But the rest is not mere 'optimization'. There is a massive difference between someone who puts their savings into a 0% interest account and sees it eaten away by inflation and in some countries (mine) a wealth tax, and someone who puts the savings as a pre-tax investment in their retirement account, which means you don't pay taxes on your salary, and in some countries (mine) don't pay taxes on the stock returns or on the equity as a wealth tax, and can get a 10% nominal annual return and see your money double >5 times over a 40 year career.

In my country the saver (A) versus the investor (B) who puts $1k in savings or a retirement fund at age 25 and liquidates at age 65 looks like this:

A) Saver: $1k salary is $500 take home pay (50% marginal tax of last bit of income). 0% interest rate at the bank. You pay a 2% effective wealth tax per year. That means $222 is left at age 65. Prices in this time went up by 3% a year, meaning what is left is the equivalent of $68 in today's dollars.

B) investor: $1k salary goes pre-tax into retirement account. You get a 10% return each year, so at 65 you have 45k. You pay no wealth tax or return taxes in the retirement account. You then pay it out as a personal income at a reduced retirement rate of 35%, meaning you have about 30k left. In today's dollars that's about 10k.

So $10000 vs $68. That's not optimization, it's the difference between gaining 10x versus losing 93% of it, or the difference between everything and nothing.

Country of example is NL. Discrepancies are bigger or smaller elsewhere depending on tax policies, but generally the difference will remain orders of magnitude.

I do agree that it's pretty easy to learn.