How to Become a Millionaire Calculator
(A lesson in compound interest.)
Want to be a millionaire? Everyone does, but do you know how much you need to save and what rate of return you need to get on your investments to reach that million level? This financial calculator helps you learn how your savings grows over time and how sensitive your final savings balance is to the rate of return you are earning.
- Did you know if you start saving $100 a month on your 18 birthday and put that money in a piggy bank, by the time you are 65 you will have $56,400 in your piggy bank (and $0 in interest).
- But if you put that $100 a month in a bank savings account that paid 3% interest then by the time you are 65 you will have $122,425 in your bank account? That’s the $56,400 you saved plus the bank paid you interest of $66,025.
- That’s a big improvement, but if you could earn 8% return on your $100 monthly savings, then by the time you are 65 you will have $566,754 in savings! This example uses 8% because that is the historical return of the stock market.
- Better yet, if you save twice the amount per month ($200 instead of $100) you will have exactly twice the value at age 65, or $1,133,508.
- So how do you become a millionaire? Start saving $177 a month on your 18th birthday, earn 8%, and have a bank account worth $1,003,155 on your 65th birthday.
If you have used our Home Budget Calculator, you can use your monthly savings plan with this tool to see how long it will take to reach your savings goal!
Once you see how big of an impact the Expected Rate of Return has on your savings growth, take a look at our Advanced Investment Return Calculator to see more details on how to make those big returns happen!