Do You Dream of Being a Millionaire?
Throughout time countless people have changed their lives by working hard, planning for success, and putting a plan in place to get where they want to go. If you want to be a millionaire in this day and age, go for it. There are methods on this site which when put into action will help you strive toward your dream of being a millionaire. One well known secret of millionaires is that they typically have multiple streams of income, and take advantage of tax favored retirement accounts investing 20% of their take home pay typically in stocks.
How Much Would I Need to Put in my 401k Each Month to be a Millionaire by 65 if I Started Today?
This site includes several financial calculators to estimate how much you would need to put away to reach your retirement savings goals. The typical figure used for average interest earned is 7% per year in making any such calculations (based upon the historical rate of return over an extended period of time for the stock market). Use the calculators so that you can see how much it would take, and determine how much you would like to put away, so that you can come up with a financial plan for your retirement goal and put it in action immediately.
To illustrate the concepts above, if a 25 year old were to put away $5,010 per year (a little over $417/month) into his/her 401k retirement plan, this would accumulate to slightly over $1,000,000 by the age of 65 (assuming 7% interest was earned per year on average). As with all investing, the earlier you start the more time the investment has to grow and earn interest, and the less you will need to invest each month to grow to $1,000,000 or more. To illustrate, say that same person didn’t start investing for retirement until age 35 he/she would need to put $10,600/year into the same 401k to reach $1 million by age 65 (assuming 7% interest). As you can see, starting 10 years earlier means the 25 year old can reach the same retirement goal, but will only have to contribute half as much per year as if he/she started at 35. Getting started early is key. Take advantage of this knowledge and get your kids and family members started early as well, provide them with this knowledge, educate them on these matters as early as possible.
Work Out Your Budget and Set a Financial Plan in Action
If you haven’t already done so, set a financial retirement goal for yourself. Do you want to be a millionaire? Make a plan. Use the financial calculators on this site and determine how much you would need to put away each month based upon your age, retirement age target, expected interest rate return of your investments. Once you have the goal, review your budget to see how much you can presently afford to put each month. Hopefully this matches your target. If it doesn’t, take a serious look at your bills and see where you can make some cuts. Is it really worth having those extra cable channels? Can you trim your cell phone bill? Can you do away with cable altogether and go with a roku stick and several of your favorite channels available that way? Can you find ways to add value at work and thereby get a raise, or promotion? Start a side business to raise extra cash specifically for investing. If you are truly committed to a plan, don’t let anything stop you, you will find a way and get it done.
According to the book The Millionaire Next Door, the typical millionaires have done just that. They are not what you may have imagined. They don’t have the brand new cars, luxury watches, and flashy things. They are typically more modest, live within their means, and remain focused on their finances and financial well being. They are also typically savers who sock away 20% of their income and put it into investments or retirement accounts to grow. If you want to achieve your financial goals, you will have to come up with a plan, and commit to it, then do whatever it takes to get there.