Not long ago, I participated in a conversation on NetworthIQ: “Struggling with breaking the first million mark“. The question posed was about mental focus and persistence needed to get to that magical $1 million mark. However, it got me thinking about the mathematical aspect of it.
As you can see from the chart, if a person invests $15,000 per year starting at age 25 and the investment gains on average 10% a year, he can get to $1 million mark by 45. The first million took 20 years! But if you keep going down the table, it only takes…
- 6 more years to get to $2 million at 51
- 4 more years to get to $3 million at 55
- 3 more years to get to $4 million at 58
- 2 more years to get to $5 million at 60
- 2 more years to get to $6 million at 62
- 2 more years to get to $7 million at 64
- 1 more years to get to $8 million at 65
Not only is this mark psychologically challenging, it is also mathematically challenging.
Now back to my situation. If I can manage to save $1 million by the age of 43, I might have a shot at making the $10 million mark!
What do you think?
PS: I also saw a similar analysis by another PF Blogger not long ago. I left a comment saying it was an excellent illustration. If you are that blogger, please let me know so I can link to you.
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.