Millionaire Calculator

Read more about Invest Money

How long would it take to make $1 million? Enter your savings and annual rate of return into this calculator to find out.

So, does having a million bucks mean you're rich?

While $1 million isn't quite what it used to be, it's still a lot of money and a substantial achievement.

You don't need a six-figure income to become a millionaire. It just takes time and planning to get to this benchmark. Below, find out how close you are to having $1M, plus strategies for earning more.

Am I a millionaire?

The calculator gives you an overall measure of how close you are to being a millionaire. Check in every once in a while to keep your financial health in check.

Here's how the calculator works:

  1. Enter Initial investment - The total value of all of your current investments. Even if you own a home, car and other personal property - it's more accurate to just include your savings, retirement accounts and investments.

  2. Monthly contribution - Your savings per month that you will contribute to investments.

  3. Expected inflation rate - The expected average long-term inflation rate. You can measure inflation in the US with the Consumer Price Index (CPI). From 1925 - 2016, the CPI had a long-term average of 2.9% annually.

  4. Expected rate of return - The annually compounded rate of return you expect from your investments.

Note: These scenarios are hypothetical as future rates of return can't be predicted with 100% certainty.

The tool will calculate:

  • How many years your savings will take to reach $1 million
  • How much that future $1 million would be in today's dollars

Does having 1 million dollars make you a millionaire?

In the U.S., a millionaire has a net wealth valued at 1 million USD or more.

Net wealth is liquid assets such as mutual funds, stock funds, and cash. Some people don't factor in retirement accounts, houses, cars, and other personal items for millionaire status.

So, if someone's liquid assets is 1 million USD or more, they are definitively millionaires.

How much do you think your current net worth?

How much interest does 1 million dollars earn per year?

Your interest on that $1 million depends on your savings or investment vehicle. Each will yield different risks and returns.

  • With a savings account
    If you have a savings account with 0.050% APY, you'll earn $5,000 in interest over the course of a year.

    To do this by hand, just divide the APY by 100 and multiply the result

    (.50/100) x $1,000,000 = $5,000

    You should choose a savings account with a high interest rate to make the most out of your savings. High yield savings accounts offer APYs 10 times more than a traditional bank account.

    Higher APYs make a huge difference in interest for large balances. With compounding, the longer you invest, the more you'll earn.

  • With the stock market
    Investing in the stock market can offer good returns. In fact, the stock market's average rate of return is about 10% per year. But it's also a lot riskier than other investment options.

    To minimize your risk, you can:

    • Invest in various long-running companies with stable profits
    • Try index funds or mutual funds - these options compile different stocks and invest them as a group

  • With real estate
    Real estate investing usually offers a high return. Plus, it's a tangible asset that hedges against inflation. You can hold an asset and let it appreciate in value while earning profits.

    If you want to just buy properties, you can rent out the real estate for extra income every month. This will help pay off your mortgage and if you sell it, you have a nice chunk of change.

Can you live off the interest from a million dollars?

With the rule of 4%, you can retire with 1 million dollars. This means you don't withdraw more than 4% of your portfolio each year. As long as you earn at least 4% in returns, you can essentially live the interest earned and need to spend the principal balance.

How much to save to become a millionaire

The key to becoming a millionaire is starting early. Here's how much you should set aside every month to hit seven figures.

  1. Decide when you want to reach $1 million
    Most people retire at 65 and want to save $1 million by that point or earlier. What's your time horizon?

  2. Find out how much your investments are expected to earn
    This question depends on your risk tolerance. It's hard to predict when the market will hit a downturn. The market went down - 36.65% in 2008.

    But if you're able to wait it out, the average annual return for the last 50 years was 11.23%.

    Bonds are generally safer returns. Their annual returns from the past 20 years was 5.31%.

    If you park your money in a traditional savings account or just in cold hard cash, it'll lose purchasing power due to inflation.

  3. Find your target savings per month
    Let's assume an annually compounded interest rate of 6%. Here's how much you'd need to save:
    • If you have 40 years until retirement - $522/month
    • If you have 30 years until retirement - $1,021/month
    • If you have 20 years until retirement - $2,195/month
    • If you have 10 years until retirement - $6,125/month

As you can see, things are a lot easier when you have more time. Don't wait to start saving.

Best ways to invest

You know how much to put away every month now. But how do you grow that money and get closer to your $1 million goal?

  1. Pay off your debt - High-interest debts can steal away your investment returns

  2. Invest in the stock market - Be sure to choose a brokerage account with commission-free trades

  3. Diversify your portfolio with ETFs and mutual funds - Investors buy into a fund that holds several assets

  4. Buy real estate - You can invest in real estate crowdfunding, REITs or physical property

  5. Use CDs - This is a risk-free investment vehicle but today, CD rates are pretty low

  6. Try alternative investments - Other options like cryptocurrency are highly volatile with potentially high returns

Bottom line

You can hit seven figures. All you need is a game plan and a timeline.

Whether your target age is 10 years or 40 years in the future, start saving yourself as much as you can.

If you're open to higher risk, consider investing in stocks, ETFs, mutual funds, or cryptocurrency.

If you're more risk-averse, consider CDs and high yield savings accounts. Check for a high APY and no monthly bank fees.

Do your homework to pick the right approach for you. And remember: Invest as soon as you can to reap the benefits of compound interest.

Amber Kong is a content specialist at CreditDonkey, a personal finance comparison and reviews website. Write to Amber Kong at Follow us on Twitter and Facebook for our latest posts.

Subscribe to CreditDonkey: Get updates on the latest deals and keep up with the best money moves.
Your privacy is important to us. Unsubscribe anytime

How to Invest Money

Tips for Investing
Invest smartly, even if you're new to the game. Discover how to begin investing in stocks and real estate with little money.
How much do you think your current net worth?
59% Less than $250,000
13% Between $250,000 and $500,000
12% Between $500,001 and $750,000
15% More than $750,000
Source: CreditDonkey. Totals may not add to 100% due to rounding.
Invest money and build wealth. Sign up to get our free email newsletter.
Best Ways to Invest $50,000

Invest $50000

Have $50,000 to invest? Here are 10+ smart investment ideas to turn $50k into even bigger money.

About CreditDonkey
CreditDonkey is a personal finance comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

About Us | Reviews | Deals | Tips | Privacy | Do Not Sell My Info | Terms | Contact Us
(888) 483-4925 | 680 East Colorado Blvd, 2nd Floor | Pasadena, CA 91101
© 2024 CreditDonkey Inc. All Rights Reserved.