Becoming a millionaire can provide a lot of financial security. And it's not an unreasonable goal for most people, even though it may feel as if it is. The reality is, if you have a long investing timeline and you make smart investments in your brokerage account, you can eventually end up with seven figures.
If you're getting started investing this year and you're hoping to hit your millionaire target in 30 years, here's how much you'd need to invest on a regular basis to end up hitting your goal.
This is what you'd need to invest to become a millionaire in 30 years time
Many people can expect to earn around a 10% average annual return over the long haul if they make reasonable investments.
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In fact, you don't need to be a skilled investor to do that, as you can put your money into a financial index called the S&P 500 that has consistently produced 10% average annual returns for decades. The S&P 500 tracks the performance of around 500 large U.S. companies, and is a pretty safe investment as long as you leave your money alone for the long term.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month.
This amount may seem like a lot, but it may actually be pretty doable for many people. The Bureau of Labor Statistics reported that median weekly earnings for full-time workers was $1,118 in the third quarter of 2023. With an annual salary of around $58,136.00, the average American could hit the goal of contributing the required $506.60 per month if they were investing a little over 10% of their income. And since many people get employer matching funds if they invest in a 401(k), they wouldn't even necessarily need to come up with the full $506.60 on their own, as their company could help them out.
Of course, some people earn less than average, and finding $506.60 per month will undoubtedly be harder for them -- or perhaps even impossible. But they should still save what they can while working toward increasing income and investing more later in life.
And those who are starting to invest late will need to put aside a larger sum each month in order to become a millionaire if they don't have 30 years. If you have just 15 years until you want to achieve millionaire status, you'd need to invest $2,622.80 per month. This amount is a lot higher because you aren't benefiting as much from the long window of compound growth that happens when your investments earn returns that are reinvested and earn returns of their own.
How to make sure you hit your target
If you are serious about wanting to become a millionaire in 30 years and you're starting to invest in 2024, the best way to make sure you end up with a seven-figure nest egg is to set up automatic transfers from your checking account to your brokerage firm or to have money taken out of your paychecks and put into your 401(k).
You can sign up for a 401(k) right now by asking your employer how to do it. If you have access to this workplace plan, you may be entitled to matching contributions made from your employer as well as tax breaks. And the money you're contributing can be taken from your pay even before you get a paycheck or direct deposit. If you don't have a 401(k), on the other hand, it's pretty easy to set up automatic contributions to an IRA or other retirement account through your bank or broker.
If you have $506.60 transferred into your account every month, invest your money, and leave it alone for 30 years, you may just find yourself a millionaire at that time. So start investing today -- and dream of what your millionaire lifestyle will look like.
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FAQs
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
How to become a millionaire in 2024? ›
Let's dive in.
- The Secret to Becoming a Millionaire.
- How to Become a Millionaire. Step #1: Analyze Your Current Situation. Step #2: Become a Master Budgeter. Step #3: Pay Off High-Interest Debt. Step #4: Invest as Early as Possible. Step #5: Save & Invest as Much as Possible. Step #6: Invest in Yourself. ...
- Closing Thoughts.
What should you invest in inside your 401(k) and Roth IRA? There are many different types of investments to choose from, but Ramsey says mutual funds are the way to go! Mutual funds let you invest in a lot of companies at once, from the largest and most stable to the newest and fastest growing.
How much money do I need to invest to make $4000 a month? ›
Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.
How much do you need to invest to make millions? ›
Suppose you're starting from scratch and have no savings. You'd need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate. For a rate of return of 5%, you'd need to save around $14,700 per month.
Can I become a millionaire in 30 years? ›
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
What's the fastest way to become a millionaire? ›
Be Consistent, Not Speculative
The simple but boring way to become a millionaire is to invest regularly and consistently over a long period of time. The Ramsey study on millionaires revealed that not a single millionaire reported that single-stock investing was a big factor in their financial success.
What will 100k be worth in 30 years? ›
Answer and Explanation: The amount of $100,000 will grow to $432,194.24 after 30 years at a 5% annual return. The amount of $100,000 will grow to $1,006,265.69 after 30 years at an 8% annual return.
How much do I need to invest to make $1,000 a month? ›
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
How much do I need to invest monthly to be a millionaire in 20 years? ›
Given an average 10% rate of return on the S&P 500, you need to save about $1,400 per month in order to save up $1 million over 20 years. That's a lot of money, but the good news is that changing the variables even a little bit can make a big difference.
To be considered very high net worth, one might need assets ranging from $5 million to $10 million, while an ultra-high net worth status could require $30 million or more. These figures underscore the subjective nature of financial classifications across different thresholds of wealth.
What is the best investment to get monthly income? ›
Overview of Top 10 Best Investment Plans for Monthly Income 2024
- Equity Mutual Funds with Dividend Choices. ...
- Post Office Monthly Income Plan (POMIS) ...
- Corporate Fixed Deposits. ...
- Senior Citizen Savings Scheme (SCSS) ...
- Rental Income from Real Estate. ...
- Annuity Plans. ...
- Peer-to-Peer (P2P) Lending. ...
- Dividend-Paying Stocks.
To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.
What's the smartest way to become a millionaire? ›
How To Get Rich
- Start saving early.
- Avoid unnecessary spending and debt.
- Save 15% or more of every paycheck.
- Increase the money that you earn.
- Resist the desire to spend more as you make more money.
- Work with a financial professional with the expertise and experience to keep you on track.
It's Highly Unrealistic. According to Alec Kellzi, a Certified Public Accountant (CPA) at FileSmart. Tax, going from zero to millionaire in just 12 months is unachievable for many people. “Amassing such wealth requires building and scaling a business at an extremely rapid and unprecedented pace,” explained Kellzi.
What is the best age to be a millionaire? ›
The average age of a first time millionaires is 37, it has been found. In data released by Betway Insider, the average age of a first time billionaire is also revealed: and is a little higher at 51. So, if you're not quite there yet, what can you do to make your first million?
How many years will it take me to become a millionaire? ›
The time it takes to become a millionaire depends on how much you save and the return you get on your money. If you invest $1,000 per month and get an 8% annual return, you'll be a millionaire in 25.5 years. The key to being a millionaire is to start investing right away and to be consistent about it.
