$1 dollar a day.When do I reach 1 million?

Here is the plan. You save $1 a day in a jar. At the end of each month you transfer
this amount to a savings account earning 3.5% annually compounded monthly. Then at the end of each year you transfer the balance in the savings account to a tax sheltered investment account such as an IRA account or RRSP account. You continue to follow this routine until you reach $1,000,000. The rate of return that you will earn on your savings determines how long it will take to reach $1,000,000.

At 8% annual return this will require 68 years.

At 10% annual return this will require 57 years

At 12% annual return this will require 50 years

At 15% annual return this will require 42 years

At 20% annual return this will require 34 years

At 30% annual return this will require 25 years

This table assumes compounding annually.

So what happens if you increase the amount to two dollars a day?

Here is the table for the same assumptions using a $2 a day savings plan.

At 8% annual return this will require 59 years.

At 10% annual return this will require 50 years

At 12% annual return this will require 44 years

At 15% annual return this will require 37 years

At 20% annual return this will require 30 years

At 30% annual return this will require 23 years


The interesting thing to note from this is that you will get there faster if you focus on your rate of return instead of the amount that you are saving. I was surprised to learn this. I intend to research ways to improve the rate of return on my investments and apss some of these investment tips along in this blog.