The Past and Future Rise in the Percentage of People Who Have (and will) Become Financially Independent

Before the Civil War, only 1% of households had a flush toilet. By 1989, 100% of households did.
In 1924, 0% of Americans had a refrigerator. By 1962, 99.5% of households had a refrigerator.
In 1994, only 10% of households had a cell phone; by 2019, 96% did.
Flush toilets, refrigerators, and cell phones were invented lifetimes apart and the adoption rates have accelerated over time. It took 130 years to go from elite few to everyone on toilets; it took 40 years for everyone to get a refrigerator; it took only 25 years for "everyone" to get a cell phone. Adoption rates for new products seem to be accelerating. 

[Adoption rates for these and other products found here at Our World in Data.]

All these products were adopted in a similar manner, though. Once upon a time nobody had it, then an elite few, than the average person and then everyone. 

Here's my bold claim: what we saw for product adoption in the 1900s we will see for financial independence in the 2000s. Right now it is few who have financial independence; by century's end, it will be most Americans.

Let's back up.

In 1900, average life expectancy in the US was 47. By 2000 it was 77.

By 1901, average daily shares traded on the New York Stock Exchange was about 3 million. This year, the average daily shares traded was about 4.5 billion.

These two - folks over 47 and shares traded - go together. As people lived longer, we needed a way to cover the expenses of more old people not working. We call it retirement. It is the most popular form of financial independence. In 1860, when an elite few were getting flush toilets, the vast majority of people worked until shortly before they died (well, the ones who made it out of childhood); today, the vast majority of people people don't have to work in the years before they die.

In the 20th century, we essentially popularized retirement, or financial independence. Pension plans and social security generally assume that you'll make this transition sometime between 60 and 70, from having to work to being "financially independent" for the remaining years or decades of your life. In 1880, the US population was 50 million, almost none of whom were retired or financially independent. Today, we have 50 million Americans over the age of 65, the large majority of whom are retired or financially independent. 

I know that not everyone over 65 is financially independent and free from work or reliance on family or friends. I also know that quite a number of folks under 65 are financially independent. (About 5% of Americans live in households with net worth of more than $3 million.)

In 1900, about 5% of the population was over 65 or financially independent. Today, about 20% of the population falls into those categories (and we now have programs like social security and Medicare, which folks in 1900 did not have).

My prediction? We will look back at the 2000s as showing an adoption curve for financial independence that looks similar to the adoption curves below for products.

Flush toilets, refrigerators, and cell phones have changed our lives quite a lot and it's wonderful that they are no longer reserved for just the elite few. It'll be fascinating to see what the world is like when we've done a similar thing with financial independence.