Becoming a millionaire may sound impossible. Millionaire may strike you as a term that’s meant for other people, not you. But that’s just not true.
How long you are willing to give yourself to achieve that goal directly shapes how much money you must sock away each year to get there. If you have 30 years to stockpile your million—as many people aiming toward retirement do—then you have to come up with only $675 a month or $8,100 a year. If you are getting matching dollars from an employer’s 401(k) or other similar retirement plan, you don’t even have to come up with all of that money yourself.
If you want to reach your goal in half the time, I can show you how that picture works as well. But whether there’s an employer match in the picture or not, you’re going to have to be more aggressive in your savings (and perhaps your earnings as well). Whatever timetable you’re looking at, if you put your mind to it, it can be done.
The Millionaire Math
Here’s what happens to your money when it’s put away to grow tax-free:
The 30-Year Millionaire
If, starting today, you can find $675 a month to invest tax-deferred at 8 percent, 30 years from today you will have your $1 million. Here’s where 401(k) plans are so useful. If you are in a 401(k) plan that matches your contribution, you may have to come up with much less money yourself.
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