How to Make a Million Dollars

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how to make a million dollars

Who doesn’t want to become a millionaire!? Anyone..? These days it seems like everyone wants to be a millionaire but most people won’t do what it takes to actually become one. Unless you have a high paying job or start your own business, being a millionaire might seem like just a dream. Well I’m here to tell you it’s not! With the right mind set and dedication it’s actually not as hard as you may think to make a million dollars.

Now, don’t get me wrong, its takes a lot of dedication and patients to make your first million and it won’t happen overnight. But with the right plan, anyone can make a million dollars.

So, What does it Really take to Make a Million when you Retire?

Since most people don’t make enough money in their lifetime to simply save up a million dollars, you have to leverage the money you do make as early as possible. By investing a portion of your current income on a regular basis you can accumulate large amounts of wealth over time due to the effects of compounding interest on your investment.

So exactly how much do you have to invest to have a million dollars?

Lets break this down based off of your monthly contributions to your retirement account and the rate of return your investments should get on average in the long term. With this information we can calculate what it would take to make a million dollars when you retire.

Your investing style will determine what return you can expect to receive in the long run. If you are invested in riskier funds, you may be able to attain higher returns in the market, compared to a conservative investor.

How Much Monthly Does it Take to Make a Million Dollars When You Retire

Market Return: 12%

Monthly Contribution: $85/month

Length of Time you Contribute: 40 years

Ending Result: $1,000,000


Market Return: 10%

Monthly Contribution: $158.13/month

Length of Time you Contribute: 40 years

Ending Result: $1,000,000


Market Return: 8%

Monthly Contribution: $286.45/month

Length of Time you Contribute: 40 years

Ending Result: $1,000,000


Market Return: 6%

Monthly Contribution: $502.14/month

Length of Time you Contribute: 40 years

Ending Result: $1,000,000

The best combination to make the most money here is to achieve a high return on your investments and have a long investment horizon (40+ years). This is easier said than done!

Your monthly contribution requirement almost doubles every time your return is reduced by 2%. And a reduced time frame to invest will have an even bigger impact on your monthly contributions requirement (you will see this below).

[You can find these calculations yourself by downloading a Time Value of Money calculator. Plug in the Annual Rate of Return %, Periods (how many payments you will make 40 years x 12 month = 480 payments), Present Value (put 0 if you have nothing saved up quite yet), and then you can set the Future Value to what your retirement goal is (in this case I used $1,000,000). Calculate to find the needed Monthly Contribution (Payment) to hit your retirement goal.]


So…What if you don’t have 40 Years to Make a Million Dollars?

This is a very good point. It is still possible to make a million dollars but you will have to be more aggressive which means increasing your monthly payments or taking on more risk. Both options are not the best depending on your age and what you can afford to contribute. But, don’t forget you may also have an employer pension and social security income when you retire.

How to Make a Million with 30 Years / 20 Years to Retirement

Market Return: 12%

Monthly Contribution: $286.13/month, $1010.86/month

Length of Time you Contribute: 30 years, 20 years

Ending Result: $1,000,000


Market Return: 10%

Monthly Contribution: $442.38/month, $1316.88/month

Length of Time you Contribute: 30 years, 20 years

Ending Result: $1,000,000


Market Return: 8%

Monthly Contribution: $670.98/month, $1697.73/month

Length of Time you Contribute: 30 years, 20 years

Ending Result: $1,000,000


Market Return: 6%

Monthly Contribution: $995.51/month, $2164.31/month

Length of Time you Contribute: 30 years, 20 years

Ending Result: $1,000,000

As you can see above, time makes a big difference!

The intention of this post is to show you with a little effort and planning you can make a million dollars when you retire. And if you’re young, your chances of accumulating more than a million can be even higher. This article doesn’t take anything else into consideration besides your monthly contributions to your retirement fund. Anything can happen in life that might give you a greater opportunity to quickly build wealth. However, for many of us, the only way to build wealth is by investing. Take advantage of the time you have left to invest and contribute more than the examples above to amplify your potential retirement income!

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