How to Become a Millionaire by Saving and Investing

Become a millionaire with small investments

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Do you think being a millionaire is out of the question for you? Think again. Even those with meager earnings can become a millionaire if they're diligent with savings and manage their spending and stick with it for long enough. Here are some examples of how you can become a millionaire through steady saving habits.

Primary Factors Affecting Millionaire Status

The most significant factors working against your millionaire status are debt and time. Becoming a millionaire is possible, no matter your situation, so long as you can keep these two factors on your side. If you can avoid consumer debt and start investing every month when you're in your 20s or 30s, you can be a millionaire by the time you retire.

If you have managed to avoid debt but haven't started saving, your first step should be to put your investments into a tax-deferred account, such as a 401(k) through your employer. You can take a balanced approach to reduce any debt while still investing in retirement accounts.

Becoming a Millionaire: Example Scenarios

By Vanguard's calculation, a portfolio of 100% stocks would have grown an average of just over 10.2% per year between 1926 and 2019. Using this historical average, you can calculate your timeline to becoming a millionaire.

The average return of 10.2% is a long-term average, and your investments might be up or down at any given time. Using Vanguard's calculations, 25 of the 94 years examined resulted in an annual loss, including one year (1931) when stocks ended the year at a 43.1% loss. When it comes to retirement accounts, the long-term return is what matters, so don't focus too much on the short-term.

If you're starting at $0, investing in a tax-deferred account, and assume a 10% return over the long haul, here's how much you'll need to save to create a $1 million portfolio.


These estimates are rough calculations done using the Office of Investor Education and Advocacy's compound interest calculator. There are many unknowns when it comes to investing, so you should never assume that returns are guaranteed. Rather, these calculations are meant to guide your savings goals.

If You Invest $50 per Month

Setting aside $50 each month doesn't seem like a big sacrifice, but it is enough to become a millionaire if you start investing early enough. At this rate, you'd create $1 million in just under 54 years. However, 54 years is a long time, especially if you're getting a late start, so you might want to consider larger monthly contributions.

If You Invest $100 per Month

With an investment of $100 each month, you'll shave roughly seven years off your timeline. If you start saving at age 25, you'll be a millionaire sometime after your 71st birthday.

If You Invest $200 per Month

Investing $200 a month for 40 years will make you a millionaire. Compared to those saving just $50 per month, you'll probably reach millionaire status nearly 15 years earlier.

If You Invest $400 per Month

You'll be a millionaire in 33 years if you invest $400 each month. That means that if you're 25 now, you'll potentially be a millionaire at age 58, which could allow you to retire earlier than you had initially planned.

If You Invest $750 per Month

Investing $750 each month for a little more than 26 years will make you a millionaire. If you're 25 now, you could have $1 million by the time you turn 52, despite contributing less than $250,000 out of your pocket.

If You Invest $1,000 per Month

It will take less than 24 years to arrive at $1 million when you invest $1,000 each month. If you have a baby today, you'll be a millionaire just after your child's college graduation. 

If You Invest $1,500 per Month

Putting away $1,500 a month is a good savings goal. At this rate, you'll reach millionaire status in less than 20 years. That's roughly 34 years sooner than those who save just $50 per month.

If You Invest $2,000 per Month

Could you imagine being a millionaire in 18 years? If you can manage to save $2,000 a month, that's what could happen. If you have a newborn today, you could amass $1 million before that child graduates from high school.

How to Increase Your Savings

Thinking about becoming a millionaire is exciting, though it could leave you wondering whether saving $2,000 a month is even possible. It may be more easily said than done, but you can increase your savings by working to earn more and spend less. If you don't indulge in lavish luxuries and avoid consumer debt, you should be able to save more as your career progresses.

Work-Sponsored Retirement Plans

Many companies offer a 401(k) retirement plan that includes matching contributions up to a certain percentage of the amount you contribute. For instance, if you contribute 4% of your income, and your employer has a 4% match, your savings rate is effectively 8%. For someone who earns $800 per week, that comes out to more than $250 in savings per month. Take advantage of this free money to double your savings rate and reach your goal of being a millionaire even sooner.

Individual Retirement Accounts

Not all employers offer a 401(k) match. There are contribution limits for IRA accounts that depend on your level of income, and ideally, you should aim to maximize your contributions up to that legal limit.

The Bottom Line

The important thing to remember is that saving and investing are important goals for everyone. No matter how much money you have at the end of the month, there's no excuse not to save for your future. If you want to be a millionaire, take responsibility for your financial future by saving money each month, and your goal will become a reality.

Frequently Asked Questions (FAQs)

What is a millionaire?

A millionaire is someone whose net worth is valued at $1 million or more. That means the total value of their assets minus their liabilities is at least $1 million.

How much will my retirement money grow?

The rate of growth for your investments depends on a number of factors, including the state of the market, your portfolio mix, and the time you have to let your money grow. Over the long term, the S&P 500—the primary stock market index—has produced an average return of 10% per year. If your portfolio is modeled after an S&P 500 index, you'll likely see a similar rate of return over decades of investing, though many years will be more or less than that amount.

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  1. Vanguard. "Vanguard Portfolio Allocation Models."

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