For most people, becoming a millionaire is a lofty goal. The median net worth across the country is $192,900, according to the latest Survey of Consumer Finances. So, if you're a long way from $1 million, you're not alone.
Because this is a big goal, some people also believe that it's unrealistic. That couldn't be further from the truth. If you manage your personal finances well throughout your career, it's entirely possible to become a millionaire. And it may happen sooner than you think.
How long it takes to become a millionaire
There are two key factors impacting how long it takes to become a millionaire:
- How much you save
- The return you get on your money
The first is self-explanatory. Everything else being equal, you'll have $1 million sooner if you're setting aside $1,000 per month compared to $500.
The return you get on your money is even more important. This is what turbocharges your savings. Let's say you're able to save $1,000 per month. If you aren't getting any sort of return on your money, it will take you 1,000 months to save $1 million. That's over 83 years, longer than the average person lives.
Now, let's say you invest your money. The stock market's average return is about 10% per year. But you may put some of your money in more conservative investments, too. We'll play it safe and assume you get an annual return of 8%. If you invest $1,000 per month, you'll have $1 million in 25.5 years.
Depending on your income, you may be able to invest more or less than that. Here's a look at how long it takes to become a millionaire based on how much you invest per month:
| Monthly contribution | Time to reach $1 million with an 8% annual return |
|---|
| $250 | 41.6 years |
| $500 | 33.3 years |
| $1,000 | 25.5 years |
| $2,500 | 16.3 years |
| $5,000 | 10.6 years |
Data source: Author's calculations.
Getting on track for $1 million
As you saw, it's a lot easier to save $1 million if you have plenty of time to do it. If you're starting at age 25, you could be a millionaire when you retire by investing about $250 per month. If you're starting at 45, you'll need to invest about $1,500 per month. It's still doable, but the faster you want to do it, the more money you need to invest.
If you haven't done so already, start investing right away. Set aside a portion of every paycheck. It can be any amount that works for you. What's important is that you make it a habit. Here are a few of the best ways to invest your money:
- Set up a 401(k) plan at work: If your employer offers this, it's well worth taking advantage. You can have contributions taken out of your paycheck, and you're able to invest with pre-tax income. Many employers also match 401(k) contributions up to a certain amount, which is essentially free money!
- Open an individual retirement account (IRA): You can open this type of account yourself through a stock broker and contribute to it with pre-tax income, just like a 401(k). Another option is a Roth IRA, where you pay normal income taxes on contributions, but withdrawals in retirement are tax free.
- Open a brokerage account: Unlike 401(k)s and IRAs, you don't save on taxes with a regular brokerage account. But there also aren't any annual contribution limits or early withdrawal penalties with brokerage accounts, like there are with retirement accounts.
You can invest in stocks with any of these accounts. They all offer investment funds, as well, that save you time by investing your money for you. Target-date funds are a popular option, because they invest your money based on the retirement year you choose.
Becoming a millionaire isn't an overnight process. It takes a lot of discipline to set aside money and invest consistently. If you put in the work, the reward is well worth it. You'll be able to build wealth and eventually have not just security, but financial freedom.
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FAQs
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.
How can I be a millionaire in 5 years? ›
Here are seven proven steps to get you wealthy in five years:
- Build your financial literacy skills. ...
- Take control of your finances. ...
- Get in the wealthy mindset. ...
- Create a budget and live within your means. ...
- Step 5: Save to invest. ...
- Create multiple income sources. ...
- Surround yourself with other wealthy people.
“Beyond entrepreneurship, no conventional career path — even medicine, law, or engineering — generates a million-dollar income for a newcomer in only a year.” So, aside from a lucky crypto investment or a windfall of some sort, Kellzi said becoming a millionaire is highly improbable.
How long does it take 100k to turn into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years.
Is it hard to become a millionaire? ›
Unless you come from a very wealthy family or win the lottery, there's little chance of becoming rich by doing nothing. You'll need discipline, a plan, and, if necessary, good advice from a registered professional who can help push you in the right direction to reach your goal of becoming a millionaire.
How to become rich in 3 years? ›
Amplify Revenue Rivulets. The key to expeditious wealth accumulation lies in augmenting your revenue streams. Prowl the landscape for avenues to bolster your earning potential — be it seizing loftier job echelons, engaging in peripheral hustles, or birthing a lucidly profitable enterprise.
What is the average age to become a millionaire? ›
The average age of millionaires is 57, indicating that, for most people, it takes three or four decades of hard work to accumulate substantial wealth.
Is 30 too late to start investing? ›
Here's the real truth: It's never too late to start growing your money. And while time does matter when it comes to investing, it doesn't need to matter in the way you might think. You may be surprised at the impact just a few years can have on your savings.
How much to invest to get $50,000 per month? ›
Assuming the average return on investment from SDI is 14% annually, you will need to invest approximately INR 43,00,000 to get INR 50,000 a month.
How to be rich fast? ›
- Invest. The goal of investing is to buy assets that may provide financial growth over time. ...
- Take advantage of compound interest. ...
- Create a plan and follow it. ...
- Start a business. ...
- Cut spending. ...
- Try taxing yourself. ...
- Consider additional education. ...
- Take calculated risks.
If you're willing to stay the course and buy and hold investments that you're willing to be patient with, it's not impossible by any means to grow a $10,000 portfolio to $1 million or more by the time you retire.
Can I live off interest on a million dollars? ›
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
How to turn 10k into 100K? ›
Let's have a look at the best ways to turn your 10k into 100k:
- Invest in Real Estate. ...
- Invest in Cryptocurrency. ...
- Invest in The Stock Market. ...
- Start an E-Commerce Business. ...
- Open A High-Interest Savings Account. ...
- Invest in Small Enterprises. ...
- Try Peer-to-peer Lending. ...
- Start A Website Blog.
In fact, according to the latest 2022 Medscape report which surveyed 13,000 doctors, the average physician graduated with $203,000 in debt. Only half of physicians reported a net worth of over $1 million, and not until the age of 55. Today let's review net worth by age for doctors through the decades.
How many Trillionaires are there? ›
No individual has claimed the status of trillionaire just yet. But a net worth equal to at least one trillion in U.S. dollars or a similarly valued currency isn't unattainable, but it will be a couple of years yet. Only 18 countries have a GDP that exceeds that amount.
How rare is it to be rich? ›
Roughly three out of 100 people in the U.S. are millionaires, but your chances of becoming a millionaire depend very much on your age, your race, and your education.
Can you make a million in 5 years? ›
Saving a million dollars in five years requires an aggressive savings plan. 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.
How to become a millionaire quickly? ›
Invest early and consistently
The earlier you start investing, the more likely you are to become a millionaire. It's that simple (thanks, compound interest)! If you start putting away $300 a month beginning at age 25, assuming an 11% rate of return, you could be a millionaire by age 57.
How many years can it take to become a millionaire? ›
It takes 32 years for the average person to become a self-made millionaire. Here's why that's a good thing. "Wealth consists not in having great possessions," Epictetus said, "but in having few wants." Sounds good, but that doesn't keep people from wanting to be rich.
What is the best job to become a millionaire? ›
10 high-paying jobs
- Computer network architect. ...
- Air traffic controller. ...
- Petroleum engineer. ...
- Lawyer. ...
- Physicist. ...
- Computer and information systems manager. ...
- Dentist. ...
- Surgeon. National average salary: $297,626 per year Primary duties: Surgeons diagnose and treat patients using surgical and non-surgical interventions.
