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

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.

By: Pat

Pat — Tue, 01 Dec 2009 20:11:14 +0000

This was a great read. Including everyone’s comments. I’m only 19, but I’m really going to try and start putting money away every paycheck. If I start now, hopefully I will develop a habit of doing it, and continually put money away to try and reach the million dollar goal.

By: Steph

Steph — Thu, 09 Aug 2007 00:35:47 +0000

Hi Phil,

Thanks for the great details! It’s great to hear you were able to put away as much as 15% of your income.

And that’s a great book you mentioned. The same people wrote another follow-up book called The Millionaire Mind which was also very good. Not as good as the original, but very good. I actually read them back to back myself (I only discovered them sometime after they were both released).

And you’re absolutely right about spending beyond your means. It happens a lot. I know I’ve been guilty of it more than I’d like to admit. And don’t let anyone tell you that you became a millionaire because of luck, it takes a lot of effort and will power to maintain that kind of spending control.

By: Phil

Phil — Mon, 06 Aug 2007 01:38:39 +0000

While working for the data processing firm I always tried to put away a minimum of 15%. After leaving that firm I started tracking my monthly bills and knew what bills would come in on what paychecks. I would put aside enough to pay the bills and some extra for other living expenses and then invested the rest of my paycheck. This is known as the "Pay Yourself First" method of investing.

I attribute two things to my financial success.

One, I was lucky enought to read the book
"The Millionaire Next Door" many years ago and I live by its tenets.

Two, I realized early on that Americans are constantly bombarded with marketing in every shape and form to get them to spend their paychecks on things they don't need. I never saw any reason to throw my money away on overpriced designer clothing or fancy cars or overpriced, overhyped cell-phones, etc. Most of the stuff you see on TV you don't need. Its just another expense. Would you be happier with the latest $500.00 cell phone or the fact that if you lost your job tomorrow you could still live quite nicely for years without having to worry about paying your bills? I prefer the later...

By: Steph

Steph — Sat, 04 Aug 2007 21:03:00 +0000

Hi Phil,

That’s great news!!! Congratulations on your success!

Do you mind if I also ask what percentage of your income you put away each month? I know it would be a great tip for others reading here to know what percentage of their income it takes to achieve the success you did.

By: Phil

Phil — Thu, 02 Aug 2007 16:49:52 +0000

I worked for a data processing firm for 10 years straight out of college. They offered a 401k plan with a 50% match. I always put the maximum into it they allowed and always picked the most aggressive growth fund they offered. I quit the firm after 10 years and rolled the $100,000 I had built up in it into an extremely aggressive growth fund with an excellent long term track record. That was 11 years ago.

On July 2nd of this year my mutual company informed me that my account had surpassed one million dollars. My salary was never anything spectacular, it averaged 50,000 dollars a year, yet I managed to become a millionaire by the age of 45, and thats after losing half of my savings in the dot.com crash.

By: Steph

Steph — Wed, 30 May 2007 02:22:10 +0000

Thanks Jim for sharing your story! It’s great to hear people succeeding!