Chances are, you know that it takes steady savings to accumulate wealth. A recent article in Business Insider actually calculated how much you’d have to invest each day in order to become a millionaire.
Suppose your investments earn an average 7% yearly return, and you want to have $1 million by the age of 65. At age 20, you’d have to invest just $9 a day to achieve your goal—which really makes you rethink the cost of a cappuccino grande and a bagel at Starbucks every morning (typically over $10). If you start at age 25, then 12 dollars a day would do the trick. At age 30, your required daily investment goes up to $18, and it stays manageable even at age 35: $27 a day.
Of course, the longer you wait, the more you’re going to have to save. At age 55, your required investment has risen to $189 a day. If you’ve waited that long, let’s hope you have an enormous income to help you catch up.
Retiring a millionaire is not as difficult as you may think. The trick is to start investing – and start as early as you possibly can. “Becoming rich is nothing more than a matter of committing and sticking to a systematic savings and investment plan,” financial adviser David Bach writes in his book, ” Smart Couples Finish Rich.”
About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years. Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.
Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association.