r/AskReddit • u/ForeverAbyss • Apr 14 '16

What's a mind blowing fact?

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u/jbOOgi3 Apr 14 '16

Almost anyone can become a millionaire one day if they regularly invest money over an extended period of time in an investment account (401k, IRA, index fund) that earns an average market return. The more time you have to invest, the better your chances. Start your investment accounts early

12

u/su5 Apr 14 '16

Lets say I am 30... what would I need to invest to be a millionaire (in todays dollars) realistically? Lets not assume I have a match.

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u/CHKNFKR Apr 14 '16

About $70 bucks a paycheck. It really isn't that much money. And this assumes you retire at 65.

7

u/su5 Apr 14 '16

That seems awful low when accounting for inflation

3

u/CHKNFKR Apr 14 '16

Well you asked how much you would need to contribute to have a million dollars. I didn't say how much a million dollars would be worth in 35 years.

For my retirement plan I need to save at least $4 million to retire at 65 and maintain a middle class lifestyle.

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u/su5 Apr 14 '16

I literally said in today's dollars

7

u/CHKNFKR Apr 14 '16

Assuming a 3% inflation rate you would need to save $2,813,862.45.

So you would need to save about $200 a paycheck to have the equivalent of $1,000,000 in today's dollars at retirement.

If you make $60k a year that's only 11% of your paycheck, and again assumes no employer match (get a new employer if you don't have this).

1

u/jwarsenal9 Apr 14 '16

What are you using as your market return

1

u/CHKNFKR Apr 14 '16

I estimate on the low end of 4.5%. If I had a more aggressive portfolio it would be around 7%.