What does money mean to you? To me, it means freedom (to do meaningful work of my choosing and not stress about money) AND a having a great living space (with a requisite jacuzzi bath). It’s never meant designer clothing, cars, fancy dinner outs or exotic trips for me. Money is important to me, specifically the making of it.
I was wondering today if I would ever be a millionaire and what it would take for me to get there. When I hear the word millionaire, it sounds so out of reach and impossible, but in the grand scheme of things, it’s probably not. And quite frankly, most of us will HAVE to be millionaires when we retire, because it’s going to cost us at least 1.5 million to life comfortably in retirement.
I like breaking down goals into their component parts and seeing what it would take to accomplish a goal, especially financial ones. So, here’s a scenario.
Let’s say you never saved in your 20s. Now you found yourself at 30 with a desire to be a millionaire by the time you retire. How could you do it? Well, you could do it and it actually doesn’t seem so daunting.
If you begin investing at age 30 and make a….
Yearly Contribution of $4,924 (Or, $368 a month)…
At Age 67, you would have $1,000,000 if your investments had an annual return rate of at least 8%.
But the KEY thing to remember is that you can’t just keep your money in some dinky savings/checking account making you 1% interest. You need to invest in something where you’re pretty likely to make at least an 8% return rate. This could mean mutual funds, stocks, or an EFT.
Now my boyfriend is telling me that to expect an 8% return is crazy – but with picking the right mutual funds and EFTs, I’m hopeful it’s possible.
When you do the math, becoming a millionaire doesn’t seem too daunting.