Want to save a million bucks?
Maybe you just want to know how long it will take to reach your first cool mil.
MSN.money has a great little tool to help you figure it out.
Lets check out some numbers.
If you are young, and can start saving now, in thirty eight years you’ll have a million without too much effort. (I know, thirty eight years sounds like a long time, but stats show most of us will live past eighty five years old now).
So, pretend you start today, with a zero balance in your account, and deposit $250.00 each month for the next eternity – then guess what – you’ll be over one million!
Total saved: $1,003,249
Starting with $0 and depositing $250 monthly over 38 years and 4 months (at a rate of return 9% compounded monthly), you will save $1,003,249.
The most exciting thing about this little number game is that you’ll have only deposited $115,000.00 total money into your account and it will have been the interest that puts you over the top!
Total deposits: $115,000
Total interest earned: $888,249
Doing the number crunching I tend to be a bit conservative. Interest on the above was only at 9%, and you may be able to do quite a bit better over the long haul. Lets take a look:
At 12% interest it will only take thirty one years to save your first million.
Total saved: $1,008,080
Starting with $0 and depositing $250 monthly over 31 years and 2 months (at a rate of return 12% compounded monthly), you will save $1,008,080.
Total deposits: $93,500
Total interest earned: $914,580
Lets say you didn’t start early enough – you are older but still want to collect a million dollars cash floating around, how long will it take you to save a million?
Using the handy dandy calculator, I can plug in some numbers and try out various scenarios:
If you are forty years old now, without one iota lick of savings, you can still reach a million before retirement – just by socking away cash every month.
Total saved: $1,000,293
Starting with $0 and depositing $500 monthly over 25 years and 6 months (at a rate of return 12% compounded monthly), you will save $1,000,293.
Initial balance: $0
Total deposits: $153,000
Total interest earned: $847,293
Even if you don’t plan to use the cash for your retirement – maybe you’d like to support charities or give the cash away, it would be nice to have a lot of money so you have the choice.
Do you find this out of reach or far fetched?
Don’t worry, the money bloggers here on families.com are here to help you budget and save!
Read how to start living more frugally and budgeting