# How much to invest each month to become a millionaire if you are 30 years old

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For the average person who was not born into a wealthy family, becoming a millionaire is easier said than done.

While some people have no desire to have a million dollars – and this is quite normal – others may find that the closer they get to that number, the more possible they will be able to afford to. new opportunities and achieve their lifestyle goals. And when you consider the fact that future retirees who plan to live on \$ 50,000 a year will need \$ 1 to \$ 1.5 million to live the rest of their lives, the idea of ​​saving \$ 1 million suddenly seems a sobering goal.

Hiding so much money can take a while, which is why it is important to start investing as soon as possible. If you’re 25 and want to hit \$ 1 million by age 65, you can invest as little as \$ 240 per month, assuming a 9% annual return. But once you hit the age of 30, those numbers start to look a little different.

Select asked Brian Stivers, financial advisor and founder of Stivers Financial Services, to help us calculate exactly how much money 30-year-olds should invest each month to become a millionaire.

## How much to invest to become a millionaire

According to Stivers, the three most important parts of investing are how much you contribute each month, the rate of return, and how much time you have to reach your goal. So, in doing the math, Stivers took into account three different rates of return and used a retirement age of 65, which would give the 30-year-old 35 to reach \$ 1 million. Here is the breakdown:

• A 30-year-old making investments that earn an annual return of 3% would have to invest \$ 1,400 per month for 35 years to reach \$ 1 million.
• If they instead contribute to investments that give a 6% annual return, they would have to invest \$ 740 per month for 35 years to end up with \$ 1 million.
• But if they choose investments that pay a 9% annual return, which is comparatively more aggressive, they would have to invest \$ 370 per month for 35 years to reach \$ 1 million.

Compared to those who start investing at 25, people closer to 30 will need to contribute a little more each month to achieve the same goal at 65. Compound interest is most powerful when it has more time to grow your money, but still, it’s never too late to start investing, even if you think you don’t have enough money to invest. conscientiously invest \$ 370 per month.

A 3% return can be achieved with a conservative portfolio of mostly bonds, while a 6% return is a bit more subdued and usually consists of a combination of stocks and bonds. And on the other hand, a 9% return denotes a more aggressive portfolio and can usually be achieved through a portfolio with a high equity content.

However, it can be very difficult to choose the “right” stocks for the desired return, and you run the risk of being swayed by the ups and downs of the market and may be tempted to sell stocks at a shorter time. ideal. However, a proven strategy is to invest in index funds or ETFs that track the stock market as a whole, such as the S&P 500.

According to Investopedia, the S&P 500 has historically generated an average return of 10% to 11% per year, so you can expect a fund replicating this index to produce similar returns, although past returns do not indicate the future success.

It has long been thought that you already have to be rich to start investing. However, many investing apps allow users to invest in fractional shares – that is, part of a stock based on how much you want to invest rather than how many stocks you want to invest. you want to buy – with as little as \$ 1. And, apps like Acorns even allow users to invest the “spare currency” they earn by making daily purchases like coffee, manuals, and clothing.

Additionally, some investing apps offer robo-advisors, like Wealthfront and Betterment, to help you determine which investments are right for you based on your risk tolerance, goals, and when you retire. Robo-advisers are also responsible for automatically rebalancing your portfolio as you get closer to your target date. This way you don’t have to worry about adjusting the allowance yourself.

### Wealth front

On the secure Wealthfront site

• #### Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle chosen. Minimum deposit of \$ 500 for investment accounts

• #### Costs

The fees may vary depending on the chosen investment vehicle. No account, transfer, transaction or commission fees (fund ratios may apply). Wealthfront’s annual management advisory fee is 0.25% of your account balance

• #### Investment options

Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources, and dividend-paying stocks

• #### Educational resources

Offers free financial planning for college planning, retirement, and home buying

### Improvement

On the secure Betterment site

• #### Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle chosen. For Betterment Digital Investing, minimum balance of \$ 0; Premium Investing requires a minimum balance of \$ 100,000

• #### Costs

The fees may vary depending on the chosen investment vehicle. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has an annual fee of 0.40%

Up to one year of free management service with a qualifying deposit within 45 days of registration. Valid only for new individual investment accounts with Betterment LLC

• #### Investment options

Stocks, bonds, ETFs and cash

• #### Educational resources

Betterment RetireGuide ™ helps users plan for retirement

Of course when you are just starting out it can feel overwhelming, especially as you get older and start having more and more competing expenses and other goals, like saving for a house, having kids, or moving to another city. . But making a list of all your monthly expenses – and exactly how much money you spend on each – can help lift some of that fog.

Understanding where your money is going can help you identify unnecessary expenses that have eaten away at your income. Then you can cut back on those expenses and free up more of your money for investing and spending that you are really interested in. And creating a budget or plan doesn’t have to be difficult – it can be as easy as writing down all of your expenses in a notebook or using an app like Mint or Personal Capital, but if you’d prefer to use a more stringent method like You Need A Budget (YNAB) then more power to you.

### mint

Information about Mint has been independently collected by Select and has not been reviewed or provided by Mint prior to posting.

• #### Outstanding features

Shows income, expenses, savings goals, credit score, investments, net worth

Yes, but users can change

Yes, bank and credit cards

• #### Availablity

Available in the App Store (for iOS) and on Google Play (for Android)

• #### Security functions

Verisign scanning, multi-factor authentication and Touch ID mobile access

### Personal capital

On the secure Personal Capital site

• #### Cost

The app is free, but users have the option to add investment management services for 0.89% of their money (for accounts under \$ 1 million)

• #### Outstanding Features

A budgeting app and investment tool that tracks both your spending and your wealth

Yes, but users can change

Yes, bank and credit cards, as well as IRAs, 401 (k), mortgages, and loans

• #### Availablity

Available in the App Store (for iOS) and on Google Play (for Android)

• #### Security functions

Data encryption, fraud protection and strong user authentication

## At the end of the line

All in all, building wealth is no easy task. Whether you want to become a millionaire or even save without a specific goal, it’s important to start investing what you can comfortably afford.

Over time, you can always level up and put some more money aside. But if your goal is really to invest up to \$ 1 million, the earlier you start, the more time your money will have to grow, meaning you will be able to contribute a smaller amount each month over the years.

Disclosure: NBCUniversal and Comcast are investors in Acorns.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.