What Does It Take To Become A Millionaire?

Traditionally, we are expected to begin working in our late teens/early 20's and continue well into our 60’s, laboring for 40 or more years before reaching retirement. What would it take for someone on this path to amass a savings of $1,000,000 over a 40-year career? Since we know the length of time (i.e. 40 years), we just need the rate of return and we can calculate the rest.

The rate of return changes drastically depending on the type of account the money is deposited in. Let's analyze 3 of the most common account types.

Traditional Savings Account (0.01% rate of return)
High-Yield Savings Account (2.0% rate of return)
Stock/Bond Investment Account (8.5% rate of return)

The table below shows the amount you would need to save each week or month for each account in order to become a millionaire by the end of a 40-year career.

Required Saving Rate To Reach $1,000,000 In 40 Years

If you were to invest in a mix of stocks and bonds, over a 40-year career you would only need to save about $60 per week or $250 per month in order to accumulate $1,000,000. Not bad! For folks just getting started in their careers, establishing and maintaining a weekly $60 saving rate should be relatively easy to do. Anything saved/invested in excess of this amount would only increase their eventual account balance even further (multi-millionaire?). If this is the path you are currently on congratulations, you are on your way to becoming a millionaire.

What about those of us who don’t plan on working for 40 years or who have already been in the workforce for a significant number of years but haven't accumulated a large savings? Can we still become millionaires? How much would someone need to save in order to become a millionaire in 30 years? How about 20? What about 10? I've crunched the numbers and laid out the results in the tables below.

Required Saving Rate To Reach $1,000,000 In 30 Years

Required Saving Rate To Reach $1,000,000 In 20 Years

Required Saving Rate To Reach $1,000,000 In 10 Years

Clearly, the smaller the time window, the greater the financial commitment required to save $1,000,000. But don’t feel bad if you’re unable to hit the necessary saving rate to become a millionaire. Even if you can only afford to save at half or even a quarter of the million dollar rate for one of these time periods, you’d still end up with a significant nest egg. If the consolation prize for “failing” to become a millionaire is a half or quarter million dollars, I’d say sign me up!

Another thing to remember is that each of these projections assumes you start with $0 saved. If you've already managed to put away some money, you've got a huge leg up on hitting our million dollar target. For example, let's say you're currently 35 years old and have accumulated $50,000 in invested savings in your 401k. With that as your starting point, how much do you think you would need to save/invest each week to have $1,000,000 by the time you turn 65 (assuming 8.5% average annual return)? Answer: $50.

That's it. You'd only need to invest $50 each week and you would retire as a millionaire!

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