FYI, here’s the best two books I’ve ever read on index fund investing that you should definitely check out to get more background on the strategy The Bogleheads’ Guide to Investing and The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life. Although, the current share price as of this writing is $29.92, so it has gone up in value over the past two years. That’s a huge difference. Grant, amazing post. The more you have saved at 55, the easier it will be to reach millionaire status. Congratulations Grant. (*again, just saving – not even investing!) Start developing the best skills that lead to more money and make you more marketable. Your blog is one of the inspirations for the journey I am currently setting out on; 7 years to Financial Independence and to add some challenge to it I am living in one of the most heavily taxed countries in the world: Sweden. Start Saving Now If you are 35 and starting from scratch, for example, you need to save around $735 per month to have $1 million by age 65, assuming an 8 percent average annual return. If you are starting at a 10% savings rate, and you increase your savings rate 1% every 30 days, you will be saving 46% in 3 years! Considering only 3% of the U.S. population has a net worth of at least $1 million… And my goal to save at least $1 million in less than 10 years also made an appearance at the $100,000 after taxes income level, but I would need to have a savings rate of at least 70% in order to make it possible. The following chart shows how long it takes to acquire $1 million based on the different time periods discussed above: 1. Assuming an 8% return on stocks, a 4% return on bonds and accounting for an inflation rate of 2%, the least you can save to become a millionaire is $306 a month if you start when you’re 20 and plan to retire at 65. There’s a couple interesting takeaways from this analysis: 1. The number of years you spend investing. historically delivered 7% annual returns even after inflation, it’s unlikely that you actually need that much money. The second most important factor in your quest to save $1 million dollars is risk. This is funny, because I had $20k savings 4 years ago and I decided that I will start investing with the half of it. A lot of good info here for people just trying to get their ‘financial fitness’ in order. Andrea Coombes' Ways and Means How to save $1 million in your 401(k) Published: Feb. 4, 2015 at 5:00 a.m. I’m in AMD right now and a bunch of GE… It’s at a loss – but overall I’m in averaging at $18 – so overtime I should be good. Alright, let’s check out my investments and portfolio growth from back in the day when I was able to go from $2.26 to over $1 million saved in 5 years. Blake Klasios is only 18 but if he saves $276 a month, increases his contribution by 3% a year and gets a 6% return, he’ll retire with more than a million dollars (Photo by Justin Poulsen) My investment strategy was simple. You must take risk if you want your money to work for you. Can I afford to retire? Next, I ran the same numbers with $100,000 after-tax income to see how long it would take to save $1 million. You won’t save $1 million until you are 72! Let’s take a big step up and look at the impact of savings rates on years to $1 million at the $200,000 after-tax income level. The math is simple and it will only take a few seconds to figure out. I have a solid chunk of money in my previously-employer-matched 401k, which I’ll be converting to a Roth IRA soon. Some investments provide more interest than others. Nearly 12 million U.S. households have net worth of at least $1 million, according to Spectrem Group, and another 31.2 million are knocking on the door, with wealth in the hundreds of thousands of dollars. I always calculate my savings rate as a percentage before-tax, but you can also do it after-tax as well. If you’re here to learn how to make a million dollars – I’ll be the first to tell you – it’s not that hard.You just need to know the steps. Banking Deal: Earn 1.85% APY on an FDIC-insured money market account at CIT Bank. Really inspiring post!! It'll take a lot of discipline and a high savings rate, but it's doable: "I call it the 50-20 formula: $50 a day for 20 years at a 10% rate of return is over $1 million." Say you retire with $1 million in your retirement fund.If you want your savings to last 30 years, you'd be able to withdraw $40,000 during the first year … Taking 4% of $1.5 million … Join the Income Community today to learn how you can create your own profitable websites from scratch. I think the focus is too much on the total sum, instead of being about the regular income from the savings. The following table shows the different combinations of investment amounts and annual rates of returns that lead to $1 million in 20 years: If you earn 2% annual returns, then you need to invest at least $41,000 each year to save $1 million in 20 years. Save $1 a Day in a Savings or Money Market Account. I commend you for staying the course and doing the transformation work. Congrats on the 60%+ savings rate! 3. I get asked a lot how I did it and how someone else can too, so I decided to outline the variables and scenarios that impact how fast you, depending on your income, can save $1 million. it’s still not going to be millionaire lifestyle :/ But earning $200,000 per year is really impressive! Fantastic time to be in those tech stocks! A 67-year-old retiree today would get, on average, $34,334 per year from Social Security, which means that their theoretical $1 million in savings could potentially be spread over many more years. Nice. They have some of the industry highest rates on high-yield savings accounts, MMAs and CDs, you can't go wrong! I typically only recommend that you invest less than 10% of your portfolio in individual stocks if you are new to investing, I currently have about 50% of my portfolio in individual companies, because the total percentage of stocks as a percentage of my overall portfolio has gradually increased to this level as the stocks I’ve invested in have risen in value.