A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Friday, May 06, 2005

How Long Does it Take to Become a Millionaire?

So, you are putting money away for retirement. Do you know how long it will take you to become a millionaire? Check out the chart below:

Here's how it works. In the left hand column, you'll see a dollar amount. This is an annual savings amount. For this chart, I am assuming that the yearly amount invested is invested at the beginning of each year. The row across the top is the expected yearly growth rate. The numbers in the grid are the number of years it will take to reach $1,000,000 based on the yearly savings amount and the expected growth rate.
        8%  10%  12%  15%
54 46 40 34
$1,500 51 44 38 33
$1,800 49 42 37 31
$2,000 48 41 36 31
$2,200 47 40 35 30
$2,500 45 38 34 29
$2,800 44 37 33 28
$3,000 43 37 32 28

The grid illustrates the importance of starting early. The earlier you can start, the better are your chances of meeting your goal. Also, starting early will allow you the benefit of being able to invest more conservatively with less risk, if you choose. So, start saving for your kids NOW!

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