How Much to Save to Become a Millionaire

Many people dream of becoming a millionaire someday, but only few are able to become one. Some of us still carry the philosophical view that money is not everything and happiness cannot be bought with money. But we live in the 21^st century and we can’t keep denying the fact that money plays an important role in our life. Dreaming bigger and adopting certain strategies in your life can lead you towards the path of a millionaire.

Work hard and save more instead of sticking on to your budget. Build an emergency fund and develop retirement savings system. Save around 15-20 percent of your annual gross income and if there are any company plans available, take advantage of it. Thus, earnings in the account grow tax-deferred. If the contributions are made on a pre-tax basis, you tax-bill will be reduced.

Reduce your basic expenditure to less than 50 percent, including taxes. You may find it hard and must be wondering how to reduce money on your basic necessities. But you can save money by limiting the amount you spend on shopping and the number of times you go out to have dinner. For example, in a family husband is earning Rs. 50000 and wife is earning Rs. 20000 monthly. You can invest wife’s salary (20000) in some government approved money doubling scheme and try to live with the salary of husband. This can help you to earn more than 1 million, in less than 5 years, as you are getting interest for your amount. A huge amount can be saved by opting for a term insurance than a permanent life insurance. Set your accounts upon Automatic savings plan. Thus, your money goes to forced savings. In addition, Invest in the best investment plans available.

Here are simple calculations that will help to achieve your goal. If you are 35 now and want to become a millionaire at the age of 65, you should save nearly 35000 every year. On the other hand, if you are able to pay Rs. 50000 every year, you can become a millionaire in 20 years. The interest you get will add up to your amount.

It is not possible for a person to become a millionaire in few weeks or months. You will have to make some sacrifices and lead a disciplined financial life by investing more to reach your financial goal.