* No, there aren't zero-risk places you can earn 5%.
* If you make 2.5%/yr on interest and spend it instead of adding it to the principal, your wealth is actually declining (average inflation 2000-2009 was 2.56%). And your 3-millionaire will actually get their 4th million in about 10 years (15% cap gains tax), at which time inflation will have done it's work nicely, wiping out most/all of the gain.
That said, you're absolutely right that the rich get richer because of savings and investment. Millions in savings can be invested in a lot of different ways that can outpace inflation (though nowadays, there's a bit more risk in the old standbys like the stock market and real estate).
* No, there aren't zero-risk places you can earn 5%. * If you make 2.5%/yr on interest and spend it instead of adding it to the principal, your wealth is actually declining (average inflation 2000-2009 was 2.56%). And your 3-millionaire will actually get their 4th million in about 10 years (15% cap gains tax), at which time inflation will have done it's work nicely, wiping out most/all of the gain.
That said, you're absolutely right that the rich get richer because of savings and investment. Millions in savings can be invested in a lot of different ways that can outpace inflation (though nowadays, there's a bit more risk in the old standbys like the stock market and real estate).