Big Life

How to Make $200,000 in a Single Step

Originally published on the Entrepreneur on 7/21/2017


There’s a very simple way to put $200,000 in your bank account: Don’t get married.

I’m not saying you shouldn’t have a long-term relationship or shouldn’t live with someone, but actually having a wedding? All entrepreneurs should carefully consider that particular societal custom. It’s a contract designed to lose money.

The U.S. wedding industry is a $72 billion dollar industry according to an IBISWorld research report. The national average cost of a wedding, according to The Knot, is $35,329 across all demographics. Now, consider that the average entrepreneur, according to Fox Businessearns about $70,000 per year and the average income level in the US is about half of that, at $35,000. As a result, we can safely assume that the average entrepreneur is likely to spend more on their wedding. While they may not spend double, let’s say the average entrepreneur’s wedding will cost in the $50,000 range.

Now, consider that the long-term average annual compounded (realized) return on U.S. large-cap stocks has been about 10%, according to the Wall Street Journal. So, instead of padding to the wedding industry coffers, if you take that $50,000, and simply invests it in the stock market, after 10 years and a conservative calculation, you’ll have doubled your money and have $100,000 in your investment account.

And that 10-year number is based on the fact that the average marriage lasts about that long — about 8 years in fact, according to the U.S. Census Bureau. We also see from this census that the divorce rate for first marriages is almost 50 percent, 60 percent for second marriages, and a whopping 73 percent for third marriages. Not very good odds at all.

And, since most marriages are ending in divorce, that means a contribution will likely be made to the $50 billion dollar divorce industry.

According to wevorce, the average divorce costs $100,000. Just as importantly, a divorce drains an entrepreneur’s energy and time, making it more difficult to operate a business (I know from personal experience). In some cases, it destroys businesses. So, in addition to the outright $100,000 cost, there is significant opportunity cost lost in divorce, too.

Our final total for the 10-year cycle of marriage and divorce comes to $200,000 using conservative calculations. So, while mom and dad might not be happy if you choose not to get married, but you’ll have a few extra grand to send them on a nice vacation where they can get over it.

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