There is an old joke that goes something like this, “if you want to become a millionaire in the commodity markets, just start with 2 million.”
The amount of money one saves, the rate of return you receive and the amount of time money has to grow are all equally important factors when trying to forecast the future value of money. Hopefully you will find the following scenarios manageable for your own situation and this will give you some guidance
For the following, I will assume that you are starting with ZERO saved. So, if you have anything saved, you will be ahead of these forecasts.
40 years to become a millionaire
If you are in your early twenties, hopefully you will find this motivating. If you save $286.45 per month and average an 8% annual rate of return, you will have $1,000,000 in forty years. This payment is typically lower or around the same for many car payments.
30 years to become a millionaire
For the thirty somethings reading this, these figures might work for you if you want a million bucks around retirement age.
If you save $670.97 per month and average 8% annually per year, you will have your million. If you are looking at luxury cars, this payment is about what you might pay for a nice luxury car.
20 years to become a millionaire
Perhaps you got into the saving game a bit late. You can still have your million, but you will have to sock away a bit more monthly.
If you save $1697.73 per month and average 8% per year, you will reach one million dollars in twenty years.
These figures were calculated with no savings and earning 8%. However, let’s say you are starting with $10,000 and earn 10% on average. Now, instead of a payment near $1,700 per month, you would reduce that payment to $1,220.48 per month.
Now that you know what you need to do, go make a million!