Comments on: Can You Save Your Way to a $1,000,000 Dollars?

By: Amanda

Amanda — Sat, 10 Dec 2011 21:06:54 +0000

I am a 26 year old mother of five small children, and I have two very irresponsible younger brothers who I can’t count on to take care of our parents in their elder years. I am currently working on putting money aside at a rate of 10k a year starting this year. A late start is better than no start at all. My dad is looking to retire in 5 years, and according to my mother, has very little money to survive on when he does. She says he has roughly 150k to retire on. I don’t know what that’ll be in 5 years from now, but I know enough to know it won’t be enough for them to survive on….

I dont necessarily have to be a millionaire, I just want to live comfortably and start teaching my children that their futures are what they have to worry about. The here and now is precisely that, here and now. There are always unforeseen things in life that we are generally unprepared for. I’d like my children to be prepared, even if its just with money my husband and I leave behind for them when we’re gone.

By: Steph

Steph — Thu, 28 Apr 2011 01:44:27 +0000

Hi Anthony,

If I’m reading your comment correctly, you’re asking if by saving $225/month you will have $1 million in 12 years at 9% interest? I hate to say this, but unfortunately I don’t need to do the math to know that it’s not going to happen…

By: Steph

Steph — Wed, 27 Apr 2011 19:51:56 +0000

Hi Alexios,

You’d have to do the math, but it wouldn’t take very long. Probably around 10 years. The key is can you continue to save that much year over year? If you can, my congratulations to you as well.

By: Steph

Steph — Wed, 27 Apr 2011 19:49:58 +0000

Hi Tracee,

You are right, I just went with the assumption that most 20′somethings don’t have that kind of money to spare. I know when I was in my 20′s I had little extra money. I had to save for a down payment on my mortgage, I had to pay my student loans. Not only that, but because you’re starting out everything is more expensive. You have no furniture, etc. As well, this is generally when you’re less careful with your money, so you spend more.

But it’s not just that, it’s also the time in your life when you make the least amount of money. It’s also the time when everything is generally more expensive. Car insurance premiums are higher. Any kinds of loans are more expensive because you have little to no history. And so on.

But if you can do it in your 20′s, then my hat goes off to you! Congratulations!! You’re ahead of me at that time.

By: Steph

Steph — Wed, 27 Apr 2011 19:45:11 +0000

Hi Josh,

That’s a really good point. Having $1 million in a retirement account is not the same as you haven’t been taxed on that money. Whether or not you’ll be taxed more later is hard to say because in the meantime you earn interest on that money. Not only that, but you should also consider that you’re deferring your taxes on your highest income to what will most likely be your lowest income.

With that in mind, it would be better to say at least $1.25 million in a retirement account or $1 million in the bank.

By: anthony

anthony — Tue, 26 Apr 2011 12:47:07 +0000

I earn 70k gross with my full time job I earn about 15k at my part time job I am very conservative but horrible with numbers and knowledge such as the powers of compund interest long story short I’m old school you save your money under your matress I am asking for help. My total expenses come to about 1800.00 dollars a month I generally have about 2k a month. In extra income I can save however the bank is not paying interest so no benefits there. I also have a 401k plan that I contribute the min. Amount to get the state match I pay 150.00 the state match 75.00 total of 225.00 per month with avg. Of 9% interest. Can any of you number guru’s help me out? Its 2011 …my goal is to earm a million dollars by time I am 50 I am 38 now

By: Alexios

Alexios — Fri, 10 Sep 2010 04:15:55 +0000

Hey there!

I am able to save 35,000 to 40,000 dollars in cash every year how long would it take me to invest to make 500k and does it have to be a 30 year plan or do I have to keep my money in it for a period of time? Thanks!

By: Tracee

Tracee — Sun, 27 Jun 2010 06:06:17 +0000

One factor you forgot to account for is time. For those of us in our early twenties, we can stretch out the time table to 40 years and see a huge difference. It takes $8,555 annually to create a million dollars in thirty years (at 7.7%), while investing $7,500 annually for 40 years actually generates 2 million! Just like waiting to start saving really harms your final investment number, saving for an additional ten years really multiplies your savings.

Yes, inflation will ensure that a million then is not the same as a million now, but it’s still a good goal to strive for. Good article!

By: TJ

TJ — Thu, 10 Jun 2010 22:12:15 +0000

I wonder how all those who had their money in the market, and were gloating like those who responded to this article in 2007, are doing today. “With very little effort….” Please. Look where the acceptance of excessive returns got us.

Great read. Too bad there are many who are quick to marginalize your realistic figures and approach.

By: Josh

Josh — Thu, 01 Apr 2010 17:18:38 +0000

Good thread. However, I’d like to point out that having a million dollars in a retirement account is not the same thing as having a million dollars. Your friendly Uncle Sam has a claim on that money, and you can bet he’ll be taking his 25%. If you also have an Uncle “Cal,” as I do, then it’s more like 35%. So a million bucks in an IRA or a 401k for me is really more like $650k. If you believe, as I do, that taxes are going much higher in the next 30 years, then it might make more sense to forego the current tax savings of the retirement plans and pay your taxes now. Then at least you know where you stand.