Having a net worth of a million dollars from scratch in five years is realistically highly unlikely, unless you've already got a lot of money. A top-tier finance job, likely garnered with an MBA from a top-flight university, is probably the highest-probability option.
According to data compiled by Rich Habits author Thomas Corley, it took the average self-made millionaire 32 years to achieve that. Dive a little deeper — since averages tend to skew things — and 52 percent needed 38 years, 21 percent needed 42 years, and only 4 percent became millionaires in less than 27 years.
Ninety percent of all millionaires become so through owning real estate.
There are over 22 million millionaires in America, which means that roughly 1 in 15 Americans are millionaires, per the 2024 UBS Global Wealth Report. The report also shared that the millionaire population in the U.S. is expected to grow 16%, to 25.4 million, by 2028.
The table below shows the present value (PV) of $1,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.
The average age of a first time millionaires is 37, it has been found. In data released by Betway Insider, the average age of a first time billionaire is also revealed: and is a little higher at 51. So, if you're not quite there yet, what can you do to make your first million?
The average IQ of self-made* millionaires is 118. The average IQ of self-made deca-millionaires (over $10M net worth) is 118. The average IQ of self-made* billionaires is 133. The average IQ of self-made deca-billionaires (over $10B net worth) is 151.
At age 35, you would need to save $700 a month to reach $1 million by age 65. Starting to save at age 35 will provide you with more flexibility than at age 50 but can still be difficult considering the many common expenses you'll incur during this life stage.
Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.
A millionaire is somebody with a net worth of at least $1 million. It's a simple math formula based on your net worth. When what you own (your assets) minus what you owe (your liabilities) equals more than a million dollars, you're a millionaire. That's it!
In fact, at the end of the five years, if you invest $1,000 per month you would have $83,156.62 in your investment account, according to the SIP calculator (assuming a yearly rate of return of 11.97% and quarterly compounding).
So, let's break it down – how many Americans have a net worth of $1 million or more? According to the 2022 Survey of Consumer Finances by the Federal Reserve, only about 12% of U.S. households have a net worth over $1 million. This means that the vast majority – 88% – are nowhere near that level.
If you were to max out your 401(k) contributions every single year, it would take you just under five years to reach your $100,000 goal. Of course, maxing out your 401(k) isn't easy to accomplish given all of life's other expenses.
Yes, it's possible to retire on $1 million today. In fact, with careful planning and a solid investment strategy, you could possibly live off the returns from a $1 million nest egg.
Self discipline (i.e., regular investing and living below one's means) are key factors. The average age of millionaires is 57, indicating that, for most people, it takes three or four decades of hard work to accumulate substantial wealth.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.