Here's how to do the same – The Motley Fool
Although there is no single number that defines "prosperous", $ 1 million or more in assets has a good way to achieve that status. And while you think Americans would have doubts about their ability to accumulate such wealth, 62% actually estimate they will become millionaires, according to GOBankingRates. If you have a similar goal in mind, you should know that is achievable provided you do the following three things.
1. Start Saving Early on
You may think that to become a millionaire, you need to smooth out lots of money regularly throughout your life. Well, you don't. You just have to start saving a decent amount from an early age and let the composition work with its magic.

PICTURE SOURCE: GETTY IMAGES.
Check out the following table. It shows how much savings you can make if you spend $ 500 a month over time:
Start saving $ 500 a month at age: |
Here's what you want by age 70 with an average annual return of 7%: |
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20 |
$ 2.4 million |
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25 |
$ 1[ads1].7 million |
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30 |
$ 1.2 million |
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35 |
$ 829,000 [19659017] TABLE AND CALCULATIONS OF CARS. As you can see, if you give yourself enough time to save and grow your money, you can accumulate pretty much without having to share too much of your earnings. The longer you wait to start saving, the less you will benefit from the composition, and the harder it will be to hit millionaire status. In our example above, a 35-year savings window is not enough time to beat $ 500 a month to $ 1 million or more. In that case, you have to sit a little over $ 600 a month to hit the target. And if you were to give yourself a 20-year savings window, you would have to spend more than $ 2,000 a month, which is a lot more difficult to do. 2. Invest wiselyThe table above assumes an average annual return of 7% of average savings, which is a reasonable assumption for a portfolio loaded with stocks. However, if you play it too safely with your investment, you will generate a much lower return and a harder time to hit $ 1 million mark. Imagine saving $ 500 a month over time, but scoring just 4% return by focusing more on bonds than on stocks. Here's what your savings will look like:
TABLE AND CALCULATIONS OF CAR. The figures above are obviously not pocket changes, but they are not nearly as impressive as the results we saw with a 7% return. The point? Invest in a reasonably aggressive way if you want to grow significant wealth. 3. Make Smart Lifestyle OptionsIt's easy to talk about saving $ 500 a month in theory, but how easy is it to do it in practice? If you are accustomed to putting down the entire paycheck month after month, it may be difficult to get out of any amount to deposit in the bank. On the other hand, if you make an effort to minimize your expenses and live well below your funds, you will have an easier time saving money and investing it for further growth. Therefore, note does not buy the most expensive house in your neighborhood and drive a simple, compact car if you do not need a larger or more advanced. Similarly, don't eat out all the time, and indulge in buying clothes and electronics sometimes, but not all the time. The more modest a lifestyle you are willing to lead, the greater the chance of collecting $ 1 million – or more. It is encouraging to see that 62% of Americans think they will be millionaires, but if they actually achieve that goal is another story. However, you have a real opportunity to hit that milestone by saving early, investing smartly and managing your spending wisely.
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