Well I've got some friends who inherited about 300k.

In my country the rental yields are about 6% and interest rates on commercial loans about 3.5%, and you can get commercial loans financed to about 70%.

In other words, with 300k down you can invest $1m. You gain about $60k a year. You pay about 25k.

The remaining $35k you use to maintain and, if you want, pay down the loan.

Average 3% long-term price inflation after 30 years means your asset grew in nominal terms by 2.5x, while your debt didn't inflate. So even if you never paid down debt but only paid the interest, you could still sell the asset for $2.5m and pay back the $700k you borrowed, leaving you with about $1.8m. The present value of that would still be double what you started with.

Of course, the $60k annual rent inflates, too. After 30 years it's about $145k. And of course, your interest of $25k doesn't inflate.

In other words, suppose you inherit this like my friends at age 20. You make an investment. By the time you're 50 years old, you've got a $2m retirement fund that cashflows >$100k a year. Yes, in nominal terms, but it's still a pretty sweet deal.

And don't forget, that is without ever paying down debt. Over the course of the 30 years, you cashflow $1-2m. If you actually use that to pay down debt and keep reinvesting the money, you'll end up quite rich.

To put the initial investment in perspective, if you get a 6% rental yield, a modest 3% appreciation, you get 9% total gross returns on $1m. You pay about 1% in costs on the $1m, and 3.5% in interest on the $0.7m, or about 3.5%. In short, you net about 5.5% on the $1m, or $55k, but you only invested $300k. So you're looking at a leveraged return of about 18% on your cash.

Suppose instead you have more modest assumptions, say 15%. If you take $300k for 30 years at that rate, you're looking at $20m, and a multi-million dollar income.

Hell even if you put it in the stock market, inflation-adjusted, at 7%, you're still looking at >2m by age 50, at which point you're looking at a >150k income, inflation-adjusted. Just from inheritance.

In other words, this person never has to save. He can spend every dime he earns, and still retire decades before most Americans. Or he could take that money and enjoy a far greater lifestyle, doubling a normal person's salary for the rest of his life and spend that, too.

And $300k isn't even an amount where you'd say 'damn, his parents were filthy rich'. It's the kind of money that a lot of upper-middle class people will inherit, when their parents pass away and leave them and their sibling a $500k paid off house, some stocks and some cash.

I've got a lot of my friends who go through life on such an easy-mode, while others literally have $300 in the bank, go into lots of college debt, and are struggling their way through life. The difference is pretty huge.

Inheriting a bunch of money and making basic smart decisions with it, is like a super generous form of welfare. Like playing the Sims with a $2k a month bonus-salary cheat, which grows into a $4k a month cheat and eventually a -20 year retirement cheat.

And I know because I grew up poor and got such a small cheat a little later in life myself, approaching 30 years old. I was already doing well and 'getting there', but the cheat made everything so much easier. It's kind of sad because as much as I respect the idea of building something, and passing it on to your children (inheritance)... it generates a society that's the opposite of a meritocracy and is dictated to a very large (inordinate) degree according to a socioeconomic birth lottery if you ask me.

Excuse the rant!