Rich Man, Poor Man Tables

The following is the table used in Richard Russell’s timeless piece “Rich Man, Poor Man.”

Rich Man, Poor Man

	Investor A		Investor B
Age	Contribution	Year End Value	Contribution	Year End Value
19			2,000	2,200
20			2,000	4,620
21			2,000	7,282
22			2,000	10,210
23			2,000	13,431
24			2,000	16,974
25			2,000	20,872
26	2,000	2,200	-	22,959
27	2,000	4,620	-	25,255
28	2,000	7,282	-	27,780
29	2,000	10,210	-	30,558
30	2,000	13,431	-	33,614
31	2,000	16,974	-	36,976
32	2,000	20,872	-	40,673
33	2,000	25,159	-	44,741
34	2,000	29,875	-	49,215
35	2,000	35,062	-	54,136
36	2,000	40,769	-	59,550
37	2,000	47,045	-	65,505
38	2,000	53,950	-	72,055
39	2,000	61,545	-	79,261
40	2,000	69,899	-	87,187
41	2,000	79,089	-	95,905
42	2,000	89,198	-	105,496
43	2,000	100,318	-	116,045
44	2,000	112,550	-	127,650
45	2,000	126,005	-	140,415
46	2,000	140,805	-	154,456
47	2,000	157,086	-	169,902
48	2,000	174,995	-	186,892
49	2,000	194,694	-	205,581
50	2,000	216,364	-	226,140
51	2,000	240,200	-	248,754
52	2,000	266,420	-	273,629
53	2,000	295,262	-	300,992
54	2,000	326,988	-	331,091
55	2,000	361,887	-	364,200
56	2,000	400,276	-	400,620
57	2,000	442,503	-	440,682
58	2,000	488,953	-	484,750
59	2,000	540,049	-	533,225
60	2,000	596,254	-	586,548
61	2,000	658,079	-	645,203
62	2,000	726,087	-	709,723
63	2,000	800,896	-	780,695
64	2,000	883,185	-	858,765
65	2,000	973,704	-	944,641
Less Total Invested:		(80,000)		(14,000)
Net Earnings:		893,704		930,641
Money Grew:		11-fold		66-fold

 

Here’s what the numbers look like assuming current IRA contribution limits and a 7% annual rate of return rather than Russell’s assumed 10%. Note that Investor B has to contribute to age 29 rather than 25 in this scenario. Still, it beats having to contribute to age 65!

Rich Man, Poor Man Assuming $5,500 Contributions and a 7% Return

	Investor A		Investor B
Age	Contribution	Year End Value	Contribution	Year End Value
19			5,500	5,885
20			5,500	12,182
21			5,500	18,920
22			5,500	26,129
23			5,500	33,843
24			5,500	42,097
25			5,500	50,929
26	5,500	5,885	5,500	60,379
27	5,500	12,182	5,500	70,490
28	5,500	18,920	5,500	81,310
29	5,500	26,129	5,500	92,886
30	5,500	33,843	-	99,389
31	5,500	42,097	-	106,346
32	5,500	50,929	-	113,790
33	5,500	60,379	-	121,755
34	5,500	70,490	-	130,278
35	5,500	81,310	-	139,398
36	5,500	92,886	-	149,155
37	5,500	105,274	-	159,596
38	5,500	118,528	-	170,768
39	5,500	132,710	-	182,722
40	5,500	147,884	-	195,512
41	5,500	164,121	-	209,198
42	5,500	181,495	-	223,842
43	5,500	200,084	-	239,511
44	5,500	219,975	-	256,277
45	5,500	241,258	-	274,216
46	5,500	264,032	-	293,411
47	5,500	288,399	-	313,950
48	5,500	314,472	-	335,927
49	5,500	342,370	-	359,441
50	5,500	372,221	-	384,602
51	5,500	404,161	-	411,524
52	5,500	438,337	-	440,331
53	5,500	474,906	-	471,154
54	5,500	514,034	-	504,135
55	5,500	555,902	-	539,425
56	5,500	600,700	-	577,184
57	5,500	648,634	-	617,587
58	5,500	699,923	-	660,818
59	5,500	754,803	-	707,076
60	5,500	813,524	-	756,571
61	5,500	876,356	-	809,531
62	5,500	943,586	-	866,198
63	5,500	1,015,522	-	926,832
64	5,500	1,092,493	-	991,710
65	5,500	1,174,853	-	1,061,130
Less Total Invested:		(220,000)		(60,500)
Net Earnings:		954,853		1,000,630
Money Grew:		4-fold		17-fold

 

And finally, here’s the same table assuming a 5% annual rate of return. Here, Investor B has to continue contributing until age 32. The lower the return, the more you have to contribute to reach the same final nest egg. That’s just basic math. But the lesson is the same: It pays to start early.

Rich Man, Poor Man Assuming $5,500 Contributions and a 5% Return

	Investor A		Investor B
Age	Contribution	Year End Value	Contribution	Year End Value
19			5,500	5,775
20			5,500	11,839
21			5,500	18,206
22			5,500	24,891
23			5,500	31,911
24			5,500	39,281
25			5,500	47,020
26	5,500	5,775	5,500	55,146
27	5,500	11,839	5,500	63,678
28	5,500	18,206	5,500	72,637
29	5,500	24,891	5,500	82,044
30	5,500	31,911	5,500	91,921
31	5,500	39,281	5,500	102,292
32	5,500	47,020	5,500	113,182
33	5,500	55,146	-	118,841
34	5,500	63,678	-	124,783
35	5,500	72,637	-	131,022
36	5,500	82,044	-	137,574
37	5,500	91,921	-	144,452
38	5,500	102,292	-	151,675
39	5,500	113,182	-	159,259
40	5,500	124,616	-	167,222
41	5,500	136,622	-	175,583
42	5,500	149,228	-	184,362
43	5,500	162,465	-	193,580
44	5,500	176,363	-	203,259
45	5,500	190,956	-	213,422
46	5,500	206,279	-	224,093
47	5,500	222,368	-	235,297
48	5,500	239,261	-	247,062
49	5,500	256,999	-	259,415
50	5,500	275,624	-	272,386
51	5,500	295,180	-	286,006
52	5,500	315,714	-	300,306
53	5,500	337,275	-	315,321
54	5,500	359,914	-	331,087
55	5,500	383,684	-	347,642
56	5,500	408,644	-	365,024
57	5,500	434,851	-	383,275
58	5,500	462,368	-	402,439
59	5,500	491,262	-	422,560
60	5,500	521,600	-	443,688
61	5,500	553,455	-	465,873
62	5,500	586,903	-	489,167
63	5,500	622,023	-	513,625
64	5,500	658,899	-	539,306
65	5,500	697,619	-	566,271
Less Total Invested:		(220,000)		(77,000)
Net Earnings:		477,619		489,271
Money Grew:		2-fold		6-fold