• Currency: USD
  • Inflation-adjusted: Yes

What do millionaires do to become millionaires? 

1. Plan - Millionaire plan what they will do with their excess money. It’s not just sitting in the bank. If the money does sit in the bank, it’s waiting for the right opportunity to be invested.
2. Save - Millionaires save. Where? Wherever they can. The reason is because they know that every dollar/Euro they save can make them more money. It’s a machine that works in their favour. These might even be small amount but compounded overtime, there can get vast amounts.

3. Invest - Money that was planned to be invested and then saved is ready for the execution stage, which is investing.

4. Optimize - There will always be better ways to do something and optimize. There can be better tax planning strategies, better ways to save and higher return investments. So, millionaires keep their eye open and see where can they improve.


How to choose the return rate on the millionaire calculator?

It depends on what assets you invest in and what you expect to be the return.
To help you here is a list of typical annual returns for different assets/investment options. Take these numbers with a grain of salt. But these can give you an idea:
  • 0 - 1% - Bank returns on your savings account in a developed country
  • (-1)% - 2% - Developed country bonds
  • 1% - 5% - Company bonds
  • 1% - 12% - Residential real estate investment with no leverage. Depends on the country/market.
  • 6% - 10% - Long term stocks investments in the US stock market.
  • 4% - 13% - Peer to peer (p2p) lending platforms.
  • 12% - 30% - Crowd investing platforms.
  • 30%+ - Your own business / website income.

So, you can plugin these numbers into the millionaire calculator and understand how long it will take you to get to your first million USD.

Then you need to go ahead and invest your money in that asset.

Here are a few rules to help you get to your goal:

  1. Expand your financial knowledge - Financial Knowledge is not complicated. Finance people and advisors make it look complicated and unreachable for the average Joe, which is not true. Also, there is so much noise in the media these days. So, it’s hard to follow and determine what you should be looking at.

  2. Control your numbers - After you’ve built your Knowledge and know your goal of 1 million USD, it’s time to measure where you are now and how you progress. You do it by tracking your net worth and cash flow.

  3. Diversify - Don’t put all your eggs in one basket. Diversify among assents, geographies and sectors.

  4. It’s a long term game - Markets tend too fluctuate which is fine as long as you don’t need that money soon. As the time the you need that money move it to a less volatile assets. You should be looking at is long term savings and investments. Only keeping this rule will do 90% of the work.
Further notes:

Millionaire calculator is useful to have 1 million USD as a milestone. However, it might be that your situation is different and you need more than that to retire. So think about your long term plans.

What kind of lifestyle do you want for yourself and align your finances with your lifestyle goals.At the end of the day, you’ll see that becoming a millionaire can be easy.

You can get to a million USD just by being consistent and disciplined with your plan, saving and investing.

Updated: September 18th, 2020