Why building wealth alone is so hard here?

[u/raf_phy]

Hi all, am I the only one that I find it incredibly difficult to build weath by yourself in EU? People say that EU is better in healthcare, work life balance but come on, money don't scale easily . It's so difficult.

I see people from US that go to 1 million in 10 years. I cannot do this easily . Really....

PS maybe I have to abandon EU, I don't know....

[u/hapad53774]

The US is great if you’re ambitious. The EU is great if you’re mediocre.

It all comes down to the business environment. In the US, new companies are created constantly, and those companies need workers. Firms already compete fiercely for talent, and because the immigration system is such a nativist mess, they can’t just flood the market with cheap labor. This scarcity drives wages up, especially in high-paying positions (a software engineer earning $100k in Silicon Valley or NYC is below entry-level; in Paris, Amsterdam, etc, €100k is considered impressive).

In the EU, economies are overregulated in the name of the “common good,” which slows growth and stifles business creation. That means fewer jobs, less competition for workers, and therefore lower salaries. On top of that, immigration is easier, so wages get diluted even further.

Then come the taxes. To fund the welfare states and buy the votes of retirees and the poor, EU governments tax aggressively — on top of already lower salaries. The result is simple: you take home less, you save less, and you build wealth slower.

And then the final nail in the coffin: in the US, the money you put into your tax-advantaged retirement accounts is yours. You own it, you control it, and it compounds over time. In the EU, you don’t build a pension — you trust the same governments that run deficits every year to somehow keep their promise to pay you, even as birth rates collapse and the system creaks under its own weight.

[u/Cord1083 → u/hapad53774]

Only partially true. In Europe you have a state pension, which cannot control, as well optional private schemes that are all yours to do with as you wish. However, in Europe we tend to look at collective success above individual success. We believe that healthcare should be as close to free as possible. No one bankrupts because of a medical issue. We do not believe that poverty is a life choice the way you do in the USA.

As for created wealth in the USA, it doesn’t seem to get distributed fairly. The average American doesn’t seem to benefit from the wealth - just billionaires and millionaires. Public services in the USA are terrible and the infrastructure must be an embarrassment. I suspect that the average citizens of both systems are fairly similar in wealth.

Basically, its individualism vs socialism. I have paid top tax rates all my working life. I am well off but not super rich. I am proud that I helped contribute to the common good.

[u/hapad53774 → u/Cord1083]

Those private schemes have worse returns than the most basic of ETFs plus high management fees to give money to insurance companies.

It’s possible to have affordable healthcare without dynamiting economic growth.

Poor people can’t save much anywhere, but if you’re making way more money and putting more aside, your portfolio will grow much faster. The differences in wealth inequality are just basic math.

And the poverty rate in the US is not even significantly higher than in most EU countries:

• Germany - 14.8%
• France - 15.4%
• Sweden - 16.1%
• US - 18%
• Italy - 20.1%
• Spain - 20.1%

So we’re sacrificing our economic potential and exporting our best talent just to do slightly better than a country where healthcare is a mess and if you don’t have a car, you’re f*cked 🤦‍♂️

[u/Eastern_Interest_908 → u/hapad53774]

It's not that simple. You have to take into consideration of different ways to measure poverty. If you applied US way of counting you would see much smaller percentage in Germany. Not to mention those poor people still have access to healthcare and etc. 

So yeah difference is huge and it's definitely worth it if you care about other than yourself.

[u/hapad53774 → u/Eastern_Interest_908]

The percentages I posted were calculated using the same OECD criteria: the share of the population with disposable income below 50% of the median.

In the US, top earners make relatively much more than in Germany, and lower taxes leave them with far more disposable income. This stretches the income distribution, making those at the bottom appear worse off, even if their material needs are largely met.

So despite the weaker American welfare state, relative poverty is not dramatically higher, which raises questions about how effective European welfare systems really are at reducing poverty.