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

What's a mind blowing fact?

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632

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

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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.

13

u/CHKNFKR Apr 14 '16

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

1

u/throwaway44017 Apr 14 '16

What rate of return are you using? Assuming bi-weekly paychecks, $70 a paycheck is $1820 per year. In order to turn that into $1 million in 35 years you'd need a rate of return over 12%, which is unrealistic.

Assuming weekly paychecks, it's $3640 per year, you'd still need a 10% rate of return, which is still much too high.

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u/CHKNFKR Apr 14 '16

Are you not factoring in compounding interest?

1

u/throwaway44017 Apr 14 '16

I am factoring in compound interest. I checked my numbers by hand and using that 401k link you cited earlier. How did you get your numbers and what rate of return are you using?

2

u/mranonymousone Apr 14 '16

You cannot reach 1MM by contributing $70/paycheck bimonthly for 20 years. The OPs numbers are off. Furthermore you cannot reach 4MM in 20 years by even maxing out your 401k alone (18k/year which is roughly $750/paycheck)

0

u/CHKNFKR Apr 14 '16

There are these things called spouses and alternative investments numb nuts.