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# How Long Does It Take to Become a Millionaire? — The Motley Fool

A million dollars is still a lot of money. In fact, it is enough to obtain approximately four times the average net value of people of typical retirement age in the United States. Surprisingly, however impressive that amount is, it is a goal that, in reality, is available to most Americans, as long as they start early enough and invest enough with a reasonable strategy.

Three factors are crucial in your quest to become a millionaire: the time, the amount you can save and the rate of return you get. Of the three, time is the most important, since with enough at your disposal it is almost trivially easy to earn a millionaire by retirement. As a result, starting your journey to millionaire status with a perspective of how long it takes to get there can give you a great motivation to start now. Since time is so important, starting now gives you the best opportunity to do so.

Image source: Getty Images

## So, how long does it take?

The following table shows how many years it will take you to achieve millionaire status based on how much you can save each month and what annualized rate of return you get. In the long term, the stock market has yielded returns that approach that annualized rate of 10%. While there are no guarantees, history suggests that it is possible that there is the possibility of retiring a millionaire by simply investing \$ 100 a month throughout a 45-year career.

Monthly savings

Years to \$ 1 million with 10% annual returns

Years to \$ 1 million with 8% annual returns

Years to \$ 1 million with 6% annual yield

Years to \$ 1 million with 4% annual yield

Years to \$ 1 million with 2% annual return

\$ 100.00

44.5

52.9

65.7

88.6

143.7

\$ 300.00

33.7

39.4

48.0

62.5

94.1

\$ 500.00

28.8

33.4

40.1

51.0

73.4

\$ 1,000.00

22.4

25.5

29.9

36.7

49.1

\$ 1,583.33

18.4

20.7

23.8

28.4

36.0

\$ 2,083.33

16.2

18.0

20.4

23.9

29.4

\$ 3,166.66

13.0

14.2

15.8

18.0

21.2

\$ 4,166.66

11.0

12.0

13.2

14.7

16.8

Data source: author.

Of course, as most of us progress through our careers, the increases make it possible to save a little more each payday. That helps us get further on the table in what we can save each month and have a better chance of achieving millionaire status much earlier.

As for those other monthly savings amounts, they rely heavily on the current annual contribution limits to employer-sponsored retirement plans, such as 401 (k) plans and IRAs. Most people under the age of 50 can save up to \$ 19,000 per year in their 401 (k) and \$ 6,000 in their IRA. Turning those numbers into a monthly savings amount shows exactly where the larger dollar amounts come from in the first table:

Monthly amount

Where he came from

\$ 4,166.66

Married couple, each with a maximum of 401 (k) and IRA

\$ 3,166.66

Married couple, each with a maximum of 401 (k)

\$ 2,083.33

Single person, with a maximum of 401 (k) and IRA

\$ 1,583.33

Single person, maximizing a 401 (k)

Data source: author.

## The clear compensation between time and money.

Image source: Getty Images.

The other thing to keep in mind about that first table is that it makes a very important transaction between time and money incredibly clear. The longer your period of time, the more you benefit from the rate of return you can earn with your money on the road. For example, in the line of \$ 100 a month, there is a difference of almost a century between the time it takes to reach \$ 1 million, depending on whether you get 10% or 2% yield. In the line of \$ 4,166.66, the difference is only six years.

In practical terms, what this means is that the longer your period of time, the more you can take advantage of having your money composed in shares so that you can reach your goal. The shorter your period of time, the more you need to rely on saving a lot of money each month to get to the millionaire status. So start now, and make the most of the time you have available to let the composition work for you.