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If someone makes $100K and saves 20% a year it will take 50 years to save a million dollars.
The median individual income in the US is $32,140. Saving 20%, it would take that person 155 years to become a millionaire.
To become a millionaire by 45 based on 20% savings alone, you would need to have made $200K a year since age 20. Most people don't make anywhere near that much money, that is why becoming a millionaire is hard.
I guess if you don't get any growth on your money. If you get even 7% growth it will take you 21 years given your above scenario.
Yes but even hedge funds are lucky to make 8% growth these days. The average retail investor is basically just gambling.
Even with above average investment returns, you still need to make over $200K a year to even come close. Otherwise you simply will not have enough capital.
Yes but even hedge funds are lucky to make 8% growth these days. The average retail investor is basically just gambling.
Even with above average investment returns, you still need to make over $200K a year to even come close. Otherwise you simply will not have enough capital.
What? I've made over 10% alone this year investing in just index funds and made around 20% last year. Expecting an average return of 7% is not asking a lot.
I make nowhere near 200k and my projections are based on 6% growth and I will get there by 45.
One to two year returns mean nothing. 2013 and 2014 have been great. 2008-2012 nobody made anything. The bigger point is, unless you have a lot of capital to invest it doesn't matter. Most people simply do not make enough money.
That's not a millionaire. That type of lifestyle would require a networth closer to 5-10 million.
Lol, become a millionaire and buy a 750k-1mil house and a 200k car. Have no money left....
And this is why I'm not weighing in. The maturity level isn't there. People who have done something to become millionaires, like investing in commercial real estate, may live in homes that cost that much, but don't drive extremely expensive cars, look for sales, save vacations at five-star hotels as a something to be done every 3 - 5 years, etc.
The op isn't interested in financial security, he just wants to be living large. Wrong motivation.
And this is why I'm not weighing in. The maturity level isn't there. People who have done something to become millionaires, like investing in commercial real estate, may live in homes that cost that much, but don't drive extremely expensive cars, look for sales, save vacations at five-star hotels as a something to be done every 3 - 5 years, etc.
The op isn't interested in financial security, he just wants to be living large. Wrong motivation.
Exactly. My dad started his own company years ago and it ended up being very profitable. But at he beginning it was him working in a factory to get experience and he also had an infant (me!).
He makes a really nice living, but we lived in a nice house in an inexpensive city, nothing too too fancy. He usually had a Lexus or a Cadillac and we all had your average Honda Accord/Civic, my mom had a van when we were little.
We went on nice vacation, but they were to Myrtle Beach and places like that. We did do one really really nice month long European vacation when I was in college but that's it!
The nice part is he saved and invested nicely so now he helps me out with rent in New York, where it's really expensive to live. I also didn't have to take out loans for college or the graduate program I did. To me, those things are more valuable than having fancy things.
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