This Man Became A Millionaire With A Salary Of Only $48,000 Per Year
It’s not how much money you make, it’s how much you keep. Etch those words into your brain and you will have step one of how to become a millionaire figured out. Of course, earning more money so you can save and invest more money will make your path to millions much, much faster, but even if you can’t figure out how to earn more in your career or get a lucrative side hustle, wealth is still possible.
Take a look at what this man, “Dale”, was able to accomplish. The most money Dale ever earned at his job in a single year was $48,000. That wasn’t his average earnings over the course of his working life. That was his best year ever. Still, he somehow managed to amass a net worth of over $3 million.
Now, if you are sitting there thinking, “Yeah, right. That is impossible.” Listen to his call into the Dave Ramsey Show and then check out how possible it really is below.
Still think it is crazy? Well, it could be if you live in an extremely expensive city like New York or San Francisco, but if you live outside of those areas, the ability to become a millionaire is still possible by age 60.
How do you do that?
Easy. Start early and automate your investments. Obviously invest what you can afford to. And if you think you can’t afford to invest, then take a look at the things you’re spending your money on. Have the newest iPhone? Buying $200 sneakers? Is your car leased? Maybe it’s time to make some new priorities if becoming a millionaire is your goal.
What Is Your Money The Goal?
Since inflation is a “thing” let’s set our goal at $2,000,000 by the time we’re 60. Some people will need more, some people will need less. It all depends on your living expenses and what you’re looking to do in retirement.
Historically, the 30-year return of the S&P 500 has been around 12%. For the sake of this, we’ll assume an 8% average annual return.
How Much Do You Need To Invest To Hit $2 Million By Age 60?
Age 20
Invested Monthly: $575
Annual Return: 8%
Account Value At Age 60: 2,007,328
What is the sacrifice to hit that over the course of 40 years? That is roughly the monthly lease payment on a $55,000 car. Would you drive a normal car until it stops working in exchange for $2mil? Heck I know I would.
Age 30
Invested Monthly: $1350
Annual Return: 8%
Account Value At Age 60: $2,011,985
Because you’re starting later, you we’re able to take advantage of the power of compounding. That means you now have to invest almost 3x what you would have if you started at age 20.
Age 40
Invested Monthly: $3,400
Annual Return: 8%
Account Value At Age 60: $2,002,669
This is where things can get unmanageable for people who aren’t high earners. And likely why a lot of people have to work well into their golden years. In order to reach the same financial end goal, you now have to invest 6x what you would have in your 20s. That is a big hill to climb, especially if your household income is not over $200K per year.
Age 50
Invested Monthly: $11,000
Annual Return: 8%
Account Value At Age 60: 2,012,406
While not entirely impossible to hit a $2 million account value, if you start investing at 50 you are in for a rude awakening.
Of course these scenarios assume that you are doing absolutely nothing to better your financial future before these ages. That said, even if you have $200,000 in your account by age 50, you still need to invest $9,000 PER MONTH to reach your $2 million goal.
So yeah, invest as early as you can and as much as you can. Let your money make money for you. That way, your golden years can actually be golden.