Minimum Wealth, part 16

Now we get to the real purpose of the advertisement. Step 9 of “building wealth on minimum wage” says to “invest your remaining money.” They claim that amount is $3,811. Even with pretending away the expense of moving to a new city and into a new apartment and the cost of a used cellphone I could only find $2,254. 

Holidays, birthdays, gifts, drinks with friends, laundromat quarters, shampoo, toilet paper, razor blades, makeup, and body lotion aren’t included in the original budget. Having a child is an unwritten taboo as childcare costs are greater than the two remainders combined, and $600/month 2-bedroom apartments are hard to find. 

“Pay off all credit cards (if any)” the average American household carrying credit card debt owes over $16,000 and spends roughly $1,300 a year just on interest. That average includes a lot of middle class members, one of the highest debt-to-income ratio groups. If our minimum wager put their move on credit, that could easily consume all the money. 

“Establish 6 month emergency fund” or save up six month’s worth of expenses in a reserve fund. But even by their fictitious accounting six months of expenses works out to be $5,344.50. By my figure it would cost $6,123 to live cheaply in Detroit for six months. 

“Open a retirement account and buy low-fee Vanguard funds” or in other words buy investment products from the firm that made this. 

This doesn’t include college debt. By 2015 1 in 13 minimum wage workers had at least a bachelor’s degree if not a master’s. The average debt held by college graduates of the class of 2016 is over $36,000. 

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