How Much to invest Monthly to Become a Millionaire?
For the sake of our experiment, we are going to use one of the biggest indices of U.S. stocks called S&P500.
Buying S&P500 is one of the safest ways to increase your wealth. Because it is less risky, the rewards are going to be small.
So let us begin.
Assumptions: historical return of 8% yearly
EXAMPLE 1:
- you start with 0 dollars and invest 100 dollars monthly
- 55 YEARS
Source: https://americanfundsretirement.retire.americanfunds.com/tools/calculators/investing-results.htm
Clearly this is an impossible way if you are already an adult, but opening an account for your baby might work.
EXAMPLE 2:
- you start with 1000 dollars and invest 100 dollars
- 54 YEARS
Source: https://americanfundsretirement.retire.americanfunds.com/tools/calculators/investing-results.htm
You need one year less if you initially invest 1000 Dollars. Not much. Let us increase the month invest amount.
EXAMPLE 3:
- monthly investment of 300 Dollars
- 41 YEARS
Source: https://americanfundsretirement.retire.americanfunds.com/tools/calculators/investing-results.htm
“Just” 41 years! We are getting there!
EXAMPLE 4:
- Crypto returns are much higher (and much riskier!)
- Although the BTC returns are in 1000% of percentages, we will assume a return of 20% per year
- Monthly investments of 300 Dollars
- 28 YEARS
Source: https://www.communitychoicecu.com/static/calcs/CompoundSavings.html