"In an era in which "get rich quick" schemes involving cryptocurrency and day trading dominate social media feeds, a quiet army of everyday workers is building substantial wealth using a strategy that is remarkably boring-and effective. According to financial expert and best-selling author David Bach, recent data reveals a specific asset allocation formula shared by hundreds of thousands of retirement account millionaires: the 70/30 rule."
"When analyzing how these ordinary employees amassed such fortunes, a clear pattern emerged. They didn't trade meme stocks or time the market. Instead, they saved consistently and adhered to a specific investment mix: roughly 70% in stocks for growth and 30% in bonds for stability. "The exact formula they saved [was] 14% of their gross income ... and then how they invested the money is key," Bach explained."
"The 70/30 split contradicts the high-risk strategies often marketed to young investors today. Bach argued "sexy is how you go broke," whereas "boring is beautiful" when it comes to building long-term wealth. The 70% allocation to stocks allows for significant appreciation over decades, while the 30% allocation to bonds provides a cushion against volatility. This balance helps investors "stay the course" during market"
Get-rich-quick schemes dominate social feeds, while everyday workers build substantial wealth through disciplined saving and conservative investing. Approximately 654,000 401(k) millionaires have fortunes derived entirely from retirement accounts, typically invested conservatively. These investors consistently saved about 14% of gross income and followed an asset allocation roughly 70% stocks and 30% bonds. The 70% stock allocation provides long-term growth potential; the 30% bond allocation cushions volatility and helps investors stay the course. The approach rejects high-risk, speculative strategies in favor of steady contributions and a balanced portfolio that compounds wealth over decades.
Read at Fortune
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