It’s Financial Freedom Friday!
If you want to become a millionaire you need to make a plan. Every goal begins with a thought, then a plan of action to get there, that ultimately leads to success!
The end result is to become a millionaire – but some other key questions come up.
– How soon do you want to have the million bucks?
– How do you want to do it?
– How will you stay on track?
One of the most tried and true ways to have your money make money for you is compounding. That’s where you invest a certain amount over time and your money makes more money. Here are some examples of compounding:
Scenario 1: Did you know if you invested $10,000 at age 18 in a 10% interest bearing investment, never touched the money until age 65, you would have around $1,078,000 in the bank.
Scenario 2: A 25 year old invest $500 per month for 10 years at a 10% rate of return, and never invests in the account again, nor touches the money until age 65 and has over $1 million the bank.
You probably didn’t know about these situations when you were 18 or 25, but there is still hope to becoming a millionaire. Here is a table that shows what you would need to invest each month to reach $1 million:
|Starting Age||Years to age 70||Investment to $1 Million|
You see, it’s not impossible to have a million bucks in the bank and retire comfortably. Although the monthly investment amount may seem high if you began investing later in life, if you have paid off your mortgage and have no other debts it may be easy to reach.
Once you have your million bucks in the bank, it will continue to earn you about $8,000 per month. Could you live on $8,000 a month? If so, you would never need to touch the million dollars and simply live off of the interest. Can you see yourself becoming a millionaire? It’s easier than you may think.