How to Become a Millionaire
Becoming a millionaire
Wrong. In fact, many people that make that much money and more aren’t millionaires and are far from it. If you want to be a millionaire, it doesn’t matter how much money you make, it matters how much money you can save. You can find out how to become a millionaire.
Make your goals and choose a time period.
If you make $40,000 a year, it’s unlikely you will be able to be a millionaire in 5 years unless you invest it all and get very lucky. Look at how much money you have and figure out how much you can save. Choose a goal time to save your million by.
For example, if you are 30 years old, are starting with $5,000, can save $2,000 a year in a taxed account and $3,000 in a tax deferred account, and earn an average interest rate of 10%, you will have $1,000,000 by age 62.
Check out this calculator to help you.
If you are younger than this, you can achieve the same time goal with less money invested because you have more time for your money to earn. If you are older, you will probably need to invest more if you want to make more.
If you can’t invest this much now, you can always work up to investing more and more. Also, if you invest aggressively over time, you have a good chance of earning more than 10% on average.
That brings us to another point, if you just put your money in the bank to sit, you will never earn anything substantial. If you want to earn as much as possible, invest in stocks. If you don’t know how to, invest in a mutual fund and let them invest your money for you. ShareBuilder has lots of mutual funds to choose from, or you can invest with their regular program in the stocks you choose.
Are you too old; does this sound unreasonable?
If you are in your 40s, 50s, or are about to retire, it seems very unlikely that you can save $1,000,000. It might be, but that’s okay because you don’t need to save $1,000,000 in order to retire and live comfortably. If you feel it’s too late to start investing, think again. It’s never too late to start, and every little bit counts. Start investing in a retirement account today.