# How To Make \$1,000,000 – The Math And Strategies That Work

Sorry, this isn’t going to be a get rich quick post, but I do want to show you how to make \$1,000,000 and have that nest egg for when you retire!

I’m a firm believer that individuals of most income levels can afford to save and invest to have over \$1,000,000 by the time they retire.  After doing some math, which I will share with you below, I was pretty surprised about how possible it is.

I’ve run several different simulations, based on different market returns and savings amounts, and I’m showing you below. Then, we’ll talk about different strategies and tactics you can use to get there.

Let’s break it down.

## Math To Save And Make \$1,000,000

The Goal: \$1,000,000

Time Frame: I’m assuming you are 25, and will save until you are 65, so 40 years.

Rate of Return: I’m running two different scenarios – 5% and 8%.  Everyone always seems to quote 8% since that has been the historical norm, but if you’re planning for retirement, I’d rather be a bit conservative.

Scenario 1: 5% Annual Return

If you want to save \$1,000,000 at an 5% annual return, you need to save about \$650 per month. That’s over 40 years.

Scenario 2: 8% Annual Return

If you want to save \$1,000,000 at an 8% annual return, you need to save about \$300 per month. That’s over 40 years – and this is probably closer to what the stock market will return over that long period of time.

## How To Get There

First, I want to highlight the huge disparity in result by just fluctuating the rate of return by 3%.  Over the time frame of 40 years, the rate of return can really make a huge difference.  As a result, you would want to recalculate a truer rate of return each year or so as you get closer to retirement and you have a true measure of how your portfolio performs.

However, even in Scenario #1 above, you can save that much!

If you need to save \$7,800 per year, there are a few ways to do it.

## Slow And Steady Investing Over Time

This isn’t a sexy way to do it, but it works. In fact, the millionaire next door can prove it.

First, make sure you are taking full advantage of your employer’s retirement benefits.  Many employers offer a 401k match – and according to The 401k Help Center, the most common contribution amount to a 401k is 6% of pay.  That means, if you make \$50,000 per year, taking advantage of your employer’s match would deposit \$3,000 into your 401k.  Since you have to contribute \$1 for \$1 to get the match (on average), that means you would have to also save \$3,000.

Just focusing on your 401k, you’ve already saved \$6,000 toward your goal of \$7,800.  Now, you only have \$1,800 left to save, which is only about \$150 per month.  I think most individuals could find \$150 if they really tried – by budgeting, working side hustles, or more.

If you want more money saving ideas, check out our ultimate list of 15 ways to save \$500 per month!

However, as your portfolio grows, and you reinvest your dividends and earnings, you could also see your gap of \$150 closing very quickly.

If you don’t know where to start when it comes to investing, check out our series of articles depending on your age:

## Invest In Real Estate

Investing in real estate is a pretty sure-fire way to achieve the \$1,000,000 mark. In fact, 90% of the world’s millionaires have made a least a portion of their wealth through real estate.

However, when you’re in your 20s and don’t have a lot of money, the idea of investing in real estate can seem like a pipe dream. Investing in real estate requires money, and when you’ve just graduated college, you don’t necessarily have a lot of it.

But times have changed. There are a lot of ways to invest in real estate. And some of those ways don’t involve a lot of money.

For starters, you can invest in bigger real estate deals for just a little bit of money up front.

We recommend two platforms for investing in real estate:

• Realtyshares – Realtyshares offers investors a variety of properties to choose from, including residential, mixed-use, commercial and retail. They don’t charge their investors fees, instead placing that burden on the property holders. Investors can start seeing a return just a few weeks after the project is funded. We are partners with Realtyshares, and they’re giving College Investor a \$100 bonus when you make your first investment using promo code Partner100.
• Fundrise – One of the most popular real estate investing sites, Fundrise has a minimum investment of \$500 and charges between 0-3% in fees. The site is ruthless about which projects it accepts – only about 5% of proposals are chosen. Fundrise is another one of our favorite sites simply because of the range of investment properties they have to choose from, but also because you don’t have to be an accredited investor to invest – they are one of the only platforms that allows this currently.

If you want to get into owning a single family residence and renting it out, you can do that as well. One of our favorite ways to do this online is with Roofstock. You can buy single family rental properties (that already have tenants and cash flow) easily online.

These options let you get into real estate, start building wealth, and hopefully setting yourself up to achieve that \$1,000,000 mark!

Starting a business is another fantastic way to achieve the \$1,000,000 goal. In fact, it’s how all of the people who became millionaires by 25 did it. Don’t think that you have to launch a mega-firm to have a million dollar business.

Today, there are plenty of bloggers, YouTubers, side hustlers, and more who’ve turned their passions into million dollar businesses.

If you don’t know where to start, look at our list of side hustle ideas. These are great starting points to help you earn more money (even on the side) to help you achieve you goal.

Remember, you only need \$300 per month if you’re 25 years old. That’s very easily doable with some small extra income ideas. If you earn more, you can work to achieve you goals faster!

## Important Tax Reminder

It’s important to think about taxes as you go for the \$1,000,000.  You need to think about whether you are counting your million before or after taxes.  Taxes can take a large bite out of your income, but if you plan your saving correctly, you can avoid these.

Readers, what are your thoughts?  Do you think most people can save \$1,000,000 if they tried?