Want to become a millionaire with a daily savings plan? No problem! Just determine when you’d like to amass that sum, then divide $1,000,000 by the number of years (but translated into days). With the touch of a couple keystones, you’ll find out how much your deposits need to be.
Here’s an example. You’d like to achieve your goal in twenty years. That would be 7,280 days. Now plug those numbers into basic calculator and you’ll soon see that deposits of $137.36 each day will total up to $1,000,000.
However, achieving that financial milestone is usually a touch more complicated than that. After all, there are usually many other factors at play, which is usually a good thing. You may not be starting at zero, and if so, you’d have to consider the total value of your current combined assets. It may include the equity in your home, and the worth of your car, jewelry, and other property. Then there’s cash you might have in the bank and investment accounts, or for some, hidden in a mattress. Don’t forget the money your deposits would earn over time if you invested it, since those earnings would reduce the amount you’d have to set aside.
While there are many such considerations at play, there is a way to keep it somewhat straightforward. I coordinated with Brett Graff, AKA The Home Economist, to develop a quick and dirty guide to amassing a million bucks. Here you go.
- Know how far ahead or behind you are. The first step is to determine today’s net worth. Start adding and subtracting to see where you stand. This exercise is important because the final number will show you if you’ve got to make up for lost time or if you’re already ahead of the game.