How to be a millionaire
I’ve often said that becoming a millionaire should be achievable—if you have a decent wage, manage your debt, get cash-flow-positive and invest in a low-fee manner on a regular schedule. Easy-peasy, eh?
Wealth building is so “simple,” I was able to explain it in a 1,000-word blog.
Alright, alright—so, cutting back on coffee and a few other personal budget items will still leave you 12% short of that millionaires’ club, but it is surprising how modest amounts can add up to millions. (We recently looked at building the $8-million portfolio in this space.)
Here is a very good and simple video that demonstrates how much it takes from various starting points—that is, your age when you begin investing—to kicking off retirement at age 67. How much would you have to invest on a regular schedule beginning in your 20s, 30s or 40s to build that $1-million portfolio?
Here are the deets in chart form: the time it takes to make a million. The following is based upon an average annual return of 6%. The amounts do not include any fees or taxes.
Time, consistency and compounding are your best pals when it comes to wealth creation.
But is a cool mill enough to retire on these days? Of course, it depends on your spending needs (that is, your lifestyle choices) and your debt levels. Obviously, eliminating debt can be very useful for accelerating your ability to accumulate wealth, and making your retirement funds go further..
I’d suggest that for the typical Canadian. $1,000,000 makes it easy to enjoy a comfortable retirement. But certainly being a millionaire today is not the same as being a millionaire 20 or 30 years ago, thanks to inflation. Being labelled a millionaire does not hold the same prestige as when I was a kid and dreamed of the day.