# How much 20-year-olds should invest monthly to become a millionaire by age 50

Most people believe that in order to become a millionaire, you must have a high-paying finance job or similar career, but this is not the case.

In fact, it is feasible for those who put in the effort; with careful planning, perseverance, and wise investments, you can make a million dollars by the time you reach retirement age, if not sooner.

Starting early is the most crucial thing you can do to increase your chances of becoming a millionaire, as this allows you to take advantage of the power of compounding interest.

### Picks for you

We estimated the amount of money you would need to save each month to acquire \$1 million over 30 years if you began with just \$1,000 at the age of 20.

For our calculations, we considered four possible return rates:

• 3% (for a conservative portfolio consisting predominantly of bonds);
• 6% (for a mix of stocks and bonds);
• 9% (for a portfolio consisting mostly of stocks or containing index or mutual funds);
• 15% return (for an optimistic portfolio incorporating stocks, ETFs, cryptocurrencies, bonds, index, and mutual funds).

When it comes to investing, three factors should be considered: the amount of money you contribute each month, the rate of return, and the time required to attain your objective.

These findings were calculated using the Smart Asset investment calculator, which measures asset growth over time.

## Our findings

We calculated that assuming an investor gets a 3% annual return on his or her assets, he or she would need to invest \$1,720 every month for thirty years in order to attain \$1 million, starting with a \$1,000 initial investment. \$100,004,764 would have been earned by the end of the thirty years.

As an example, if a 20-year-old decided to invest in assets at a 6% rate of return, they would need to invest \$990 per month for thirty years in order to accumulate \$1 million. Overall, \$356,400 in contributions would be required, yielding total interest earnings of \$643,092.

As an alternative, if you were to pick assets that provide a 9% annual return, which is comparable to a more aggressive investment strategy, they would need to invest \$540 every month across thirty years in order to acquire a total of \$1 million.

A 20-year-old investing in assets with a 15% yield return is a very ambitious goal, but it would need far less monthly investing over the course of thirty years, averaging \$132. After all of the time and effort, the donations would equal less than \$47,520, but the interest earned would total \$952,294 in the end.

## Investing techniques

You may grow your portfolio by, for example, purchasing more blue-chip stocks and building up a large number of big holdings over an extended period of time.

Dollar-cost averaging, which may lead to a reduced average price per share paid, may also benefit investors on their way to \$1 million.

As a result, you’ll be able to finance your investments without having to alter your daily routine drastically. So it’s crucial that you don’t feel like your investment objectives are being constrained, since this will help you keep to them.

## Final thoughts

Refrain from giving in to the temptation of lifestyle inflation if you want to become a millionaire. Make more savings and investments instead of spending more just because you have the means to do so. You’ll be able to achieve your financial objectives much more quickly.

Inevitably, your real earnings are determined by the performance of your assets. When you are young, you have the opportunity to take a bit more risk with your investments and look for opportunities that have the potential to earn you a 9% or 15% return on your money. Try investing in stocks to get gains that may beat inflation while also increasing your savings.

All in all, maintaining discipline and developing and adhering to a long-term financial strategy are all important steps. Making your first million dollars won’t be simple, but it doesn’t have to be a hopeless endeavor. Although the journey will be hard, you will be satisfied with the end result in the long run.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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