I can become a millionaire in “X” years or less!

Dan Zajac, philadelphia financial advisor

I’m a millionaire!

Who wouldn’t want to say these words? (Well, who wouldn’t want to say these words in private? If you say them in public… probably not so cool.  Bragging about your money is about as cool as bragging about how advanced your 3-month-old is.  “But, have I told you? Tommy is soooo smart!”)

These words and this number have become the de facto sign of accomplishment – an arbitrary standard that signifies you’ve “made it.”

I have learned during my career that there are many ways to “make it” (some of which I plan to cover in a post to follow).  One of the most common success stories is based on simple, good old hard work.  Hard work in the form of saving early, saving often, and saving annually. As you’ll learn from this article, it takes years to reach the million-dollar milestone (sorry to burst the bubble for all you stock-pickers out there).

But as you know, it’s important to set goals.  If your goal is to save a million dollars, here is one way to do it.

Getting To $1,000,000 – The Simple Math

The math behind saving $1,000,000 is easy.  But actually saving a million dollars is not easy at all. 

Assuming your money earns zero interest, you simply divide your annual saving into $1,000,000.  The answer is equal to the number of years it takes to amass one million.  Assuming you save the following amounts, you can see how many years it will take.

  • Save $10,000/year – It will take 100 years
  • Save $25,000/year – It will take 40 years
  • Save $50,000/year – It will take 20 years

What can we learn from this?  We learn that accumulating $1,000,000 takes time.  Even if you are able to save $50,000 per year (which would be amazing – and something I rarely see people accomplish), it would take 20 years to reach $1,000,000.  20 years, in my opinion, is a long time.

Sorry to disappoint you! There is no ‘get rich quick’ scheme here.

But I Have to Earn Something on my Investment, Right?

Yes. By investing your money, it is possible you will earn more than zero percent per year.  How much more?  That depends on how much risk you are willing to assume. 

Let’s suppose we evaluate identical savings rates, as mentioned above, and calculate that we earn 3%, 7%, and 10% interest per year in 3 separate scenarios (please keep it in mind that these are not predictions or based on past performance; these are simply hypothetical interest rates).

The chart below details how many years it would take, based on 3 annualized rates of return and 3 annual savings rates, to reach the goal of $1,000,000. (It is for illustrative purposes only and does not attempt to predict actual results of any particular investment.)


  3% 7% 10%
Save $10,000/yr 46.90 years 30.73 years 25.16 years
Save $25,000/yr 26.67 years 19.73 years 16.89 years
Save $50,000/yr 15.90 years 12.94 years 11.53 years


It’s worth noting that the longest time it would take to accumulate $1,000,000 is 46.90 years.  46.90 years is obviously a long time, but it’s considerably less than the 100 years it takes with zero interest. If the same $10,000 earns 10% per year, you will reach $1,000,000 in just over 25 years – nearly half the time.

The least amount of time it takes to reach $1,000,000 is 11.53 years.  Contributing $50,000/yr (an extremely high amount, and an amount I rarely see clients reach) and earning 10% interest per year (another high amount) gets you to $1,000,000 in just over 11.5 years.

So what can I learn from this?

Getting to $1,000,000 is hard.

We can learn that two factors have a major impact on how quickly you reach $1,000,000.

One – how much money you save or invest each year.

Two – the rate of interest that money earns.

But by making a commitment to save, and by investing your money for the long term (because as you can see, the time horizon is long), you can put yourself on the path to $1,000,000.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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