Becoming a millionaire can provide a lot of financial security. And it's not an unreasonable goal for most people, even though it may feel as if it is. The reality is, if you have a long investing timeline and you make smart investments in your brokerage account, you can eventually end up with seven figures.
If you're getting started investing this year and you're hoping to hit your millionaire target in 30 years, here's how much you'd need to invest on a regular basis to end up hitting your goal.
This is what you'd need to invest to become a millionaire in 30 years time
Many people can expect to earn around a 10% average annual return over the long haul if they make reasonable investments.
Read more: unlock best-in-class perks with one of these brokerage accounts
In fact, you don't need to be a skilled investor to do that, as you can put your money into a financial index called the S&P 500 that has consistently produced 10% average annual returns for decades. The S&P 500 tracks the performance of around 500 large U.S. companies, and is a pretty safe investment as long as you leave your money alone for the long term.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month.
This amount may seem like a lot, but it may actually be pretty doable for many people. The Bureau of Labor Statistics reported that median weekly earnings for full-time workers was $1,118 in the third quarter of 2023. With an annual salary of around $58,136.00, the average American could hit the goal of contributing the required $506.60 per month if they were investing a little over 10% of their income. And since many people get employer matching funds if they invest in a 401(k), they wouldn't even necessarily need to come up with the full $506.60 on their own, as their company could help them out.
Of course, some people earn less than average, and finding $506.60 per month will undoubtedly be harder for them -- or perhaps even impossible. But they should still save what they can while working toward increasing income and investing more later in life.
And those who are starting to invest late will need to put aside a larger sum each month in order to become a millionaire if they don't have 30 years. If you have just 15 years until you want to achieve millionaire status, you'd need to invest $2,622.80 per month. This amount is a lot higher because you aren't benefiting as much from the long window of compound growth that happens when your investments earn returns that are reinvested and earn returns of their own.
How to make sure you hit your target
If you are serious about wanting to become a millionaire in 30 years and you're starting to invest in 2024, the best way to make sure you end up with a seven-figure nest egg is to set up automatic transfers from your checking account to your brokerage firm or to have money taken out of your paychecks and put into your 401(k).
You can sign up for a 401(k) right now by asking your employer how to do it. If you have access to this workplace plan, you may be entitled to matching contributions made from your employer as well as tax breaks. And the money you're contributing can be taken from your pay even before you get a paycheck or direct deposit. If you don't have a 401(k), on the other hand, it's pretty easy to set up automatic contributions to an IRA or other retirement account through your bank or broker.
If you have $506.60 transferred into your account every month, invest your money, and leave it alone for 30 years, you may just find yourself a millionaire at that time. So start investing today -- and dream of what your millionaire lifestyle will look like.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
FAQs
If you have $506.60 transferred into your account every month, invest your money, and leave it alone for 30 years, you may just find yourself a millionaire at that time. So start investing today -- and dream of what your millionaire lifestyle will look like.
How much do I need to invest to have a million dollars in 30 years? ›
To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.
How much do I need to invest monthly to be a millionaire in 20 years? ›
Given an average 10% rate of return on the S&P 500, you need to save about $1,400 per month in order to save up $1 million over 20 years. That's a lot of money, but the good news is that changing the variables even a little bit can make a big difference.
How much money do you need to invest to become a millionaire? ›
If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.
How much do I need to invest to make $1 million in 5 years? ›
Saving a million dollars in five years requires an aggressive savings plan. Suppose you're starting from scratch and have no savings. You'd need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate.
How much money do I need to invest to make $1000 a month? ›
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
How long will it take to turn 500K into $1 million? ›
If invested with an average annual return of 7%, it would take around 15 years to turn 500k into $1 million.
What happens if you invest $1,000 a month for 20 years? ›
Investing $1,000 a month for 20 years would leave you with around $687,306. The specific amount you end up with depends on your returns -- the S&P 500 has averaged 10% returns over the last 50 years. The more you invest (and the earlier), the more you can take advantage of compound growth.
How to make $1000 a month in retirement? ›
As a general rule of thumb, you will withdraw approximately 5% of your retirement income every year for expenses. The Balance breaks down the numbers below: Start with $240,000 and multiply it by 5%, which equals $12,000. Next, divide $12,000 by 12 months, which totals $1,000 per month.
How much money do I need to invest to make $4000 a month? ›
Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.
According to IRS standards, a monthly income of approximately $45,000 qualifies someone as wealthy. However, if you're aiming for the top 1% as measured by the Economic Policy Institute (EPI), you'd need to earn about $68,277 monthly.
How to make 10k a month? ›
In this guide, we'll share the 10 best ways to make $10,000 per month, including:
- Sell Private Label Rights (PLR) products 📝
- Start a dropshipping online business 📦
- Start a blog and leverage ad income 💻
- Freelance your skills 🎨
- Fulfillment By Amazon (FBA) 📚
- Flip vintage apparel, furniture, and decor 🛋
Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.
How long does it take to turn $100 000 into a million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years.
How long to become a millionaire investing $1,000 a month? ›
If you invest $1,000 per month, you'll have $1 million in 25.5 years.
| Monthly contribution | Time to reach $1 million with an 8% annual return |
|---|
| $500 | 33.3 years |
| $1,000 | 25.5 years |
| $2,500 | 16.3 years |
| $5,000 | 10.6 years |
1 more rowNov 20, 2023
“Beyond entrepreneurship, no conventional career path — even medicine, law, or engineering — generates a million-dollar income for a newcomer in only a year.” So, aside from a lucky crypto investment or a windfall of some sort, Kellzi said becoming a millionaire is highly improbable.
Can $1 million dollars last 30 years in retirement? ›
Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.
How does $160 month over 40 years become over $1 million? ›
Multiplying 480 (40 years) payments by $160 equals $76,800. So in this case, the impact of compounding has almost a 13X multiplier effect: $76,800 was contributed to create a final future value over $1,000,000.
Will $3 million be enough to retire in 30 years? ›
Spending Needs and Savings Longevity:
For a $3 million retirement fund, anticipate a monthly income of $6,250 over 40 years, barring investment growth or loss. Factors such as lifestyle choices, inflation, and healthcare costs will influence how long your savings last.
How long will it take to save 1 million dollars? ›
If you invest $1,000 per month, you'll have $1 million in 25.5 years.
| Monthly contribution | Time to reach $1 million with an 8% annual return |
|---|
| $500 | 33.3 years |
| $1,000 | 25.5 years |
| $2,500 | 16.3 years |
| $5,000 | 10.6 years |
1 more rowNov 20, 2023
