How much money you need to save each day to become a millionaire by age 65
Mike Blake/Reuters
"Becoming rich is nothing more than a matter of committing and sticking to a systematic savings and investment plan," writes financial adviser David Bach in his book "Smart Couples Finish Rich."
"You don't need to have money to make money," he writes. "You just need to make the right decisions - and act on them."
To illustrate the simplicity of building wealth over time, Bach created a chart (which we recreated below) detailing how much money you need to set aside each day, month, or year in order to have one million dollars saved by the time you're 65.
The chart assumes you're starting with zero dollars invested. It also assumes a 12% annual return.
The simplest starting point is to invest in your employer's 401(k) plan, points out Ramit Sethi in his New York Times bestseller, "I Will Teach You To Be Rich." Next, he says, consider contributing money towards a Roth IRA or traditional IRA, individual retirement accounts with different contribution limits and tax structures.
While the numbers in the chart below are not exact (for simplicity, it does not take into account the impact of taxes, and 12% is a high rate of return), they give you a good idea of how coming up with a couple of extra dollars each day can make an enormous difference in the long run, particularly if you start saving at a young age.
Next time you consider running to Starbucks for a $4 latté, think about this chart and consider redirecting that coffee cash to your savings:
- Singapore Airlines was ordered to pay a couple compensation for 'mental agony' after they complained their business-class seats didn't automatically recline
- Welcome to the white-collar recession
- A software engineer shares the résumé he's used since college that got him a $500,000 job at Meta — plus offers at TikTok and LinkedIn
- 'Panchayat' season three to come out on Prime Video on May 28
- Top places to visit in Pahalgam in 2024
- April auto sales – Hyundai continues to hold the second position as Tata Motors inches closer
- Amul to sponsor USA cricket team in T20 World Cup
- LG Saxena gives nod to sack 223 DCW employees hired 'without due procedure'
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market