How much annual income is required to become a millionaire? (rate, increase)

[freemkt]

There are some income levels at which it's more or less impossible to become a millionaire, and there are other income levels at which it is easy to become a millionaire.

What's the minimum income level needed to make becoming a millionaire feasible?

[lmw36]

This is an EXTREMELY open ended question. You need to nail down more specifics before any one can even begin to explore the possibilities.

Are you trying to reach a million by a certain age? Are you talking about a million dollars in cash, or the ability to make an income of one million per year? Would you/this person have children, what are housing costs, transportation costs, and any other costs of living?

Try being specific and I think you'll be getting more hits.

[Pitt Chick]

I was think along the same lines, lmw36!

OP, how do you define millionaire?
Someone who makes a million a year?
Someone who has a million in investments?
Other?

Lower income people have become millionaires. I am not sure annual income is a good indicator.

[Frank Merton]

Originally Posted by freemkt

There are some income levels at which it's more or less impossible to become a millionaire, and there are other income levels at which it is easy to become a millionaire.

What's the minimum income level needed to make becoming a millionaire feasible?

First decide what age you want to become a millionaire. Then calculate how many years from now is that (N). Divide one million by N.

If you were an actuary, you could also add in an assumed inflation rate on your present spending and make a few adjustments, but since your annual spending is probably much smaller than a million, the difference wouldn't amount to more than a percent or so.

By the way, what you appear to have in mind is not the way to become a millionaire. One does get there this way sometimes, but far better to start a business or marry a millionaire.

[ragnarkar]

It's doable on $40K a year (below average yearly salary) if you:

1) Save at least $1000 a month and invest it in a safe mutual fund averaging 10% a year.

2) Your salary increases at the rate of inflation and so does your contributions.

3) Don't mind waiting till you're over 60 to be a millionaire (in 2012 dollars.)

Personally, I may be frugal but I don't wish to save my money till the end like that. If this sounds too bleak, then I'd suggest the following:

1) Work on making more money.

2) Do something enjoyable once in a while as long as it won't break your bank.

3) But still continue to be frugal, spending less money on meaningless stuff and more on meaningful experiences.

[sunsprit]

It's all in how you use money to achieve your goals ...

You must decide what you must have for necessities and what is discretionary income ...

Then you've got to figure out how to put that discretionary income to work for you.

As well, you must pursue maximizing your income potential at your work.

[slackjaw]

Question should be based on savings levels, not income levels.

[Hamish Forbes]

For a thoughtful answer to this question, see: "The Ages of the Investor," by William J. Bernstein.

[Pragmaticus]

You can be a millionaire at any income level. You just need the time to get there.

Some may need few generations and they would have to explain for their great grand kids the goal and if they stick to it, they will reach the goal one day, .

[freemkt]

Originally Posted by lmw36

This is an EXTREMELY open ended question. You need to nail down more specifics before any one can even begin to explore the possibilities.

Are you trying to reach a million by a certain age? Are you talking about a million dollars in cash, or the ability to make an income of one million per year? Would you/this person have children, what are housing costs, transportation costs, and any other costs of living?

Try being specific and I think you'll be getting more hits.

Good questions. I'm thinking of millionaire in the Millionaire Next Door sense, which is having a net worth of $1 million (and I think the author excludes home equity from the required million).

Let's say by age 50, and I'm thinking of an average sustained annual income, as opposed to a sports pro who makes a ton of money for 5 or 10 years and that's it.

Say a person with median housing expenses (not unusually high or low) and financially undistracted by children (e.g. without children or if with children, with a spouse having substantial income)