Save And Become A Millionaire


This entry is part 2 of 8 in the series So You Want To Be A Millionaire

Save

That sounds simple, and probably too simplistic for some. But do not overlook it! Consider how much saving $100 a month will impact your monetary value in 20 to 30 years time.

$100 a month gives $1200 per year

Without any interest, that is $12000 in 10 years, $24000 in 20 years, and $36000 in 30 years.

Let’s see what this looks like now, when we add a 10% per year interest rate, with compounding.
Year Amount
1 $1,200.00
2 $2,520.00
3 $3,972.00
4 $5,569.20
5 $7,326.12
6 $9,258.73
7 $11,384.61
8 $13,723.07
9 $16,295.37
10 $19,124.91
11 $22,237.40
12 $25,661.14
13 $29,427.25
14 $33,569.98
15 $38,126.98
16 $43,139.68
17 $48,653.64
18 $54,719.01
19 $61,390.91
20 $68,730.00
21 $76,803.00
22 $85,683.30
23 $95,451.63
24 $106,196.79
25 $118,016.47
26 $131,018.12
27 $145,319.93
28 $161,051.92
29 $178,357.12
30 $197,392.83

You’re probably thinking that 10% is too high to expect. That can surely be challenged, but for argument’s sake, let us say you could only attain an average of 5% per year. How do projections appear now?

Year Amount
1 $1,200.00
2 $2,460.00
3 $3,783.00
4 $5,172.15
5 $6,630.76
6 $8,162.30
7 $9,770.41
8 $11,458.93
9 $13,231.88
10 $15,093.47
11 $17,048.14
12 $19,100.55
13 $21,255.58
14 $23,518.36
15 $25,894.28
16 $28,388.99
17 $31,008.44
18 $33,758.86
19 $36,646.80
20 $39,679.14
21 $42,863.10
22 $46,206.26
23 $49,716.57
24 $53,402.40
25 $57,272.52
26 $61,336.14
27 $65,602.95
28 $70,083.10
29 $74,787.25
30 $79,726.62

Though significantly less, it is still not a bad picture. Remember, this is with just $100 a month.

“Just $100″? You ask.

Maybe you are one of those persons who are struggling to make ends meet, and just do not have a cent left over. Ok, this might just be true for some people. But analyse your own situation. $100 a month is about $5 each business day in the month (ie. $5×20 business days)

Is $5 a day too hard? Before you say yes, think of all the ways that you spend your money as you go through the day. Chances are, there are some things that are really not necessary – maybe a pack of cigarettes, a cup of coffee, unnecessary snacks etc. Only you can tell…Are you comfortable with the idea that your coffee could be costing you as much as 70-200K in the long run?

Action Plan

+ · For one week make a note of your daily expenses
+ · Review your findings and determine what can go

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Related posts:

  1. So You Want To Be A Millionaire? – Introduction
  2. Buy A Home?
  3. Automate The Millionaire Plan
  4. Outliers, The Story of Success -Stuff I learnt
  5. Pay Yourself First!


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