I have a superpower. I understand your skepticism, but it’s true. What I have is so rare that it functions in our society as the equivalent of a superpower by giving me power to do things that most mere mortals simply cannot do. What is this superpower you might ask?

Is it x-ray vision?


Can you fly?

Only in my dreams.

Do you have superstrength?

Well, I did benchpress 225 lbs a few months ago.

But my superpower is none of those. My superpower is that I don’t suck at money. I’m not alone. There are a few of us meta-humans out there. In fact, it’s possible you are one of these rare meta-humans. But we’re like a needle in a haystack. I realized this while watching a presentation by Mr. Money Mustache, and this post borrows heavily from his ideas.

Our society has become more and more financially complex such that negotiating our financial world properly requires a great deal of interest, education, and discipline. Only a tiny percentage of Americans possess all three of those attributes, so if you are lucky enough to be one of the few, it’s like having a superpower. Guess what? I qualify, and I bet a lot of you do too.

What Does It Mean To Suck At Money?

Nearly every American willing to work at a full-time job has enough money to meet all their needs, to purchase many of their reasonable wants, and to quit working completely within a decade or at most two. Yet it is so rare for someone to be financially independent in their 30s or 40s that it makes the news when it happens.

Now life is about more than a race to financial independence. Sometimes it is reasonable to choose to spend money on something that makes you happier even if it delays your financial independence by a little bit. But it is not reasonable to mismanage your finances so much that you never actually become financially independent. Yet that is what most Americans do, even high income Americans. How do we know? Well, let’s take a look at the Great American Savings Rate. Back in October, the Motley Fool calculated it at 5.7%. What does that mean? Well, financial independence is not a particularly complicated equation. It is primarily a function of your savings rate.

If you earn 5% real on your investments, and you save 20% of your income, you can retire on 80% of your income after 37 years. It’s actually usually a little better than that, since many expenses go away in retirement and you pay much less in taxes when you’re only earning 80% as much and you don’t owe any payroll taxes because it isn’t earned income. It’s a lot better than that if you pay taxes like a doctor. But let’s use 37 years just for ease of calculation.

Some superpowers are better than others

Some superpowers are better than others

So if you want to retire after 30 years, how much do you need to save? About 28%.

20 years? About 43%.

10 years? About 66%.

Now, since the average American household makes about $56,000, and the average world household makes $18,000, the average American household can live better than the average world household and still put away more than 66% of their money.

Now, if that’s what can be done on an average American income, what could you do on a high-income professional income? Surely 10 years to financial independence is a relatively easy mark to hit, no? Even if you start out way in the hole and make lots of mistakes early on, you should still be able to pull it off in 20 years thanks to your high income. This is classic “Live Like A Resident” stuff.

But what happens if you only save 5.7%? Well, it takes about 63 years, the functional equivalent of never. The average American (and remember half are below average) would never be able to retire without Social Security. Thus, most people suck at money and have to be bailed out in their old age by a social insurance program (a program I am fully supportive of, by the way, since I see that most people lack this superpower.)

It’s easy to see why. Look how complex money is these days.

First you have to be able to do some math. Most Americans struggle with fractions and percentages, much less are able to use a financial calculator and understand concepts such as compound interest and the future value of money.

Second, you have to learn a whole new terminology: Roth IRAs, expense ratios, capitalization rate etc.

Finally, you have to actually have the discipline to design and follow a plan for multiple decades. Most Americans don’t even have the discipline to maintain a healthy weight; how are they going to maintain a financial plan?

Disability Insurance

So if you can do all of those things, congratulations, it’s like you have a financial super power. The purpose of money, like the purpose of life, is to find joy and be happy. Since happiness mostly doesn’t come from buying stuff, but rather from meaningful work and strong relationships, it seems kind of silly to spend half or more of your income on something that doesn’t make you any happier. At the very least, examining every purchase for its “happiness value” ought to help you get to a 20-30% savings rate.

Poor People Suck At Money

Now, there are always examples out there of people who have had terrible things happen to them. Appropriately taking care of them is the role of government and charitable programs both of which I wholeheartedly support with my time and money. That’s not what I’m talking about. I’m talking about people who didn’t finish high school because they didn’t feel like it. Then stay in a minimum wage job because they’re not interested in learning any new skills. Then go down to the payday loan store and rack up some 466% debt so they can play the lottery. Does that person suck at money? Yes they do.

Middle Class People Suck At Money

Let’s talk about the middle class for a minute. What is the evidence that they suck at money?

  • Exhibit A: 5.7% savings rate
  • Exhibit B: Percentage of Americans who leave part of their salary on the table by not getting their 401(k) match (25%)
  • Exhibit C: Percentage of middle class Americans driving a vehicle, even churning vehicles, that only a wealthy person can afford (25%)
  • Exhibit D: Number of whole life insurance policies purchased and then surrendered prior to death (70-80%)

Just because you’re smart enough to get through high school and maybe even through college doesn’t automatically grant you this financial superpower.

High Earners Suck At Money Too

Lest you think I’m picking on people who make less than I do, I want to point out that most high earners suck at money too. Look around you. How many of your colleagues can explain in their own words how a mutual fund works? How many of them are aware of even the most well-known behavioral finance pitfalls? Why have so many attendings not even purchased disability insurance? How many have purchased a cash value life insurance policy but don’t know what a Backdoor Roth IRA is? Why are there so many that haven’t refinanced their loans, or still have loans a decade or more out of school? Why do they buy expensive houses and cars when their net worth is still negative? Why don’t they know how to log in to their 401(k) website? Because they suck at money.

Even Financial Advisors Suck At Money

Don’t get me wrong. I think financial advisors are way ahead of the curve. But even so, way too many of them also suck at money. I find it amazing how many people take advice from financial advisors who are not financially independent. I mean, if they’re 30, fine. But the guy is 50, punishes himself with 60 hour work weeks, and hasn’t had a vacation in years and you want his financial advice? Really?

Carl Richards likes to talk about “real financial advisors.” I like that, because it makes it obvious that there are so many out there that are masquerading as such. But even among the “real,” experienced, fiduciary, fee-only advisors with the highest designations in their field it is appalling how many of them are giving bad advice- individual securities, actively managed mutual funds, cash value life insurance before maxing out retirement accounts or paying off debt, market timing, bad asset location advice etc. The truth is that even real advisors have to focus so much on acquiring new clients and “the big rocks” like getting clients to save more and not bail out of the market during relatively minor downturns that they don’t even bother learning the comparatively minor stuff.

What Hope Do You Have?

So, now that we’ve established that almost everyone sucks at money, what hope do you have? Just one. Unlike many superpowers, you don’t have to be born on another planet to have this one. You don’t even have to be bitten by a radioactive spider. This superpower is much more like Ant-man’s. Not only was it acquired as an adult but it can be taught and learned. You don’t even have to develop the technology yourself. You can just borrow it from those who have already invented it. Do yourself a favor. Become a superhero and take control of your financial life. But always remember….with great power comes great responsibility.

What do you think? Do you think the ability to become financially independent is a superpower? Why or why not? What are you doing to acquire it? Comment below!