fuzzbox

So if I save $450 a month until I'm 65 I will definitely be a millionaire. At this point it is a possibility but I rather use it now than later. Ha.

gitarzan

I once figured that out too, when I was young.

Back then I think it was $100 a month when savings accounts paid over 4%. Of course that never panned out. I always needed the money for staying alive.

I've never been one to consider money to be the great scorecard, but I wish I had bothered to saving some a lot earlier than I actually did.

robberry

Making the first million is the hard part.

StupidlyBrave 

Actually, making the first hundred is hard. Once the plates are made, it's just paper and ink.

fuzzbox

If I hit $100,000 at an early age that would be amazing. So far I'm going at a steady rate but I doubt everything until I get a nice raise.

contango 

I found it pretty easy to become a millionaire. I've got something like 4,500,000 sitting in cash in my desk drawer. The downside of that is that the four-and-a-half million are old Turkish lira, which are probably worth just about enough to buy myself a coffee next time I'm out (as long as I can do without the sprinklies and whipped cream).

The notes still look nice with all the zeroes on the end though.

ilikebikes

Hey Fuzzy. Its really not as sweet as you think it is, just imagine you in your current situation, with a million dollars. Thats about it.

Minesbroken

by the time your 65 a million dollars will be worthless lol

Alfster 

Just to be a nerd about your post, here's a spreadsheet I created for compound interest calculations with your numbers. It assumes that your $450 per month ($5400 per year) contribution increases by 2% per year based on keeping up with inflation, and assumes you get raises to cover the increase in contribution. It also assumes you can get a 6% rate of return on your investment. The last assumption, which is what compount interest means, is that you have it invested in a tax-free type savings account (ie: you don't pay income tax on your gains).

As you can see, you make your first million after 38 years. If you don't increase your contributions by 2% each year, leaving them at $5400 per year, you will make your first million after 42 years.

pgoat

Foo Post of the year, so far.

Alfster 

If you assume a 2% inflation rate over the next 45 years (I'm assuming Fuzzy is approx 20 years old with 45 working years left ... ugh) a million dollars when she reaches 65 will be worth $418,000.00 in today's dollars. Not worthless, but certainly not what it can buy today.

tizeye 

Not if you start at $999,999.

Sadly, some people invest it and even if they started at that level, still would not make it.

pgoat

I'm old enough to remember when the term 'millionaire' carried a helluva a lot more weight than it does today.

That said, It's never too late to start socking away something for your future.

ModoVincere

perhaps, but would you rather she not prepare at all?

overthehillmedi

Thithe yourself first automaticcally then the pain is not so bad. Autodeposit of the paycheck with an automatic transfer of 10% before you do the budgetting works for a lot of people.

Alfster 

I'm trying to say the opposite. This shows how important it is to start early, and that over the long run, she will have to likely save more to be able to retire comfortably. A million dollars today may allow a person to retire, however when Fuzzy is 65, a million dollars will not be enough for a comfortable retirement. Unless she's lucky enough to have a company pension plan.

ModoVincere

just wasn't real clear. What you are describing is the time value of money. And yes, the quicker she starts, the more she will have.

Taerom

$450 a month could buy you a lot of really good beer.

ModoVincere

$100/ month can make a lot of really good beer.

Taerom

ooohh, that leaves you with $350 for coffee!

RUOkie

now, I really like coffee, but that is a lot!!

ModoVincere

depends on what you're drinking. Some of it (Kopi-Luwak is pretty pricey).
$65 for 200 grams
http://www.google.com/products/catal...9164530815858#

Some coffee's are going upwards of $100/lbs.
http://www.forbes.com/2006/07/19/pri...0featA_ls.html

fuzzbox

At this rate with my budgeting I have a few extra hundred dollars but every so often I end up getting some expensive stuff.

dahut

+1