For the average person, becoming a millionaire is easier said than done. It requires grit, tenacity, and an understanding of investment strategy.
The path to a million is steep, yet the climb is not impossible. We’ve done the calculations to see just how much you’ll need to set aside to save up $1 million by the time you’re 67.
Assuming that the average rate of return on long-term investments is around 10 percent annually, here’s a breakdown of how much you’ll need to invest each month to get to that goal, depending on where you are in life.
Age 23: $415 (about $14 a day)
Total contributions: $219,535
Total interest: $780,955
Age 30: $651 (about $21 a day)
Total contributions: $289,695
Total interest: $710,464
Age 35: $912 (about $30 a day)
Total contributions: $351,120
Total interest: $649,797
Age 40: $1,300 (about $42 a day)
Total contributions: $422,500
Total interest: $577,934
Age 50: $1,966 (about $65 a day)
Total contributions: $401,217.55
Total interest: $598,782.45
If you’re ready to start putting your money to work, the simplest starting point is to invest in your employer’s 401(k) plan, a Roth IRA, or SEP IRA.
If you’ve maxed out your contributions to these funds, start looking into low-cost index funds and robo-advisors to create a diversified stock portfolio without having to put in hours of research each day.