If you want to become a millionaire, investing money can help make that happen. If you open a brokerage account and begin buying assets that provide a generous return, the money your investments earn can be reinvested and earn even more for you. This is called compound growth, and it's a powerful wealth-building tool.
But just how quickly can investing make you a millionaire? Here's what you need to know.
Here's how fast you can become rich by investing
The timeline for how fast investing can make you rich is going to depend on two factors: how much you invest and the returns you earn when you do it. The table below shows when you'll end up with $1 million in your brokerage account based on these two factors.
| Annual Investment | 4% Return | 8% Return | 10% Return |
|---|
| $2,000 | 78 years | 49 years | 42 years |
| $5,000 | 57 years | 37 years | 32 years |
| $10,000 | 42 years | 29 years | 26 years |
| $20,000 | 29 years | 21 years | 19 years |
Data source: Author's calculations
As you can see, finding more spare cash to transfer from your bank account to your brokerage account makes a huge difference in your timeline for becoming a millionaire. But so does the return you get on your invested funds.
So if you want to amass a seven-figure nest egg as quickly as you can, you'll need to both invest as much as possible and be smart about what you put your money into.
How to free up more cash to invest and find the right investments
If you want to become a millionaire ASAP, you'll need to work on finding more money to invest. You can often do this by:
- Taking on a side job such as driving for a rideshare company, walking dogs, or babysitting, depending where your strengths are.
- Negotiating for a higher salary. You can ask for more money when you're hired, request a raise at a performance review, or look for a better-paying job.
- Working overtime if your company allows you to do so.
- Making a budget that prioritizes investing and cuts discretionary spending.
- Keeping fixed expenses low, such as by switching to a cheaper used car instead of buying a new one and investing the money saved.
You'll also need to find the right investments. For some people, this means investing in shares of stock in individual companies. This approach can pay off big time if the company happens to perform well, but it requires a lot of specialized knowledge as well as time to research investments. It's also riskier.
Alternatively, you could invest in index funds, such as an S&P 500 index fund. Index funds track the performance of a financial index, with the S&P 500 index tracking the performance of around 500 of the largest companies in the U.S.
Since index funds spread your money around many different investments, there's a reduced risk of loss, and they are much easier to invest in as you don't need to independently evaluate each company. However, the potential returns aren't as high as buying individual stocks because your money is spread among so many businesses.
Ultimately, you'll need to decide how much risk you're willing to take on in search of higher returns. But remember that investing more and investing smartly can go a long way toward making you a millionaire much faster, so sacrificing a little to do these things can be a wise financial move.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
FAQs
If you invest $10,000 a year and get 7% returns it will take you 31 years to reach $1 million invested. That breaks down to $833.33 a month. This is the most common timeline for people who will reach millionaire status: the slow burn over a few decades of work.
How long does it take to become a millionaire from investing? ›
If you invest $1,000 per month, you'll have $1 million in 25.5 years.
| Monthly contribution | Time to reach $1 million with an 8% annual return |
|---|
| $250 | 41.6 years |
| $500 | 33.3 years |
| $1,000 | 25.5 years |
| $2,500 | 16.3 years |
1 more rowNov 20, 2023
Becoming a millionaire through stock investing is possible but not guaranteed. It depends on various factors such as your initial investment amount, rate of return, and time horizon. The key is to start early and give your investments enough time to grow.
How fast can you make money by investing? ›
Here's how fast you can become rich by investing
| Annual Investment | 4% Return | 10% Return |
|---|
| $2,000 | 78 years | 42 years |
| $5,000 | 57 years | 32 years |
| $10,000 | 42 years | 26 years |
| $20,000 | 29 years | 19 years |
Oct 28, 2023
If you want to be rich, many financial experts will suggest you invest. You can become rich in other ways than investing, of course, such as inventing something useful or starting a business. But the genius behind investing is that the money you earn is passive income.
How to be a millionaire in 1 year? ›
“Beyond entrepreneurship, no conventional career path — even medicine, law, or engineering — generates a million-dollar income for a newcomer in only a year.” So, aside from a lucky crypto investment or a windfall of some sort, Kellzi said becoming a millionaire is highly improbable.
How to become rich in 5 years? ›
Here are seven proven steps to get you wealthy in five years:
- Build your financial literacy skills. ...
- Take control of your finances. ...
- Get in the wealthy mindset. ...
- Create a budget and live within your means. ...
- Step 5: Save to invest. ...
- Create multiple income sources. ...
- Surround yourself with other wealthy people.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Is it too late to start investing at 30? ›
You can put your money to work over the next 35 years to build wealth and financial stability. Time is your greatest asset. So whether you're 30, or whether you're 40, right now, the most important thing is to get started.
Can day trading make you rich? ›
Day trading is a strategy in which investors buy and sell stocks the same day. It is rarely successful, with an estimated 95% loss percentage. Even if you do see a gain, it must be enough to offset fees and taxes, as well.
Trading is often viewed as a high barrier-to-entry profession, but as long as you have both ambition and patience, you can trade for a living (even with little to no money). Trading can become a full-time career opportunity, a part-time opportunity, or just a way to generate supplemental income.
Is investing $100 a month good? ›
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
How long does it take to get good at investing? ›
On average, it takes between one and five years to grasp investing and understand the stock market, with key learning areas including research, fast-paced decision making, and growing market knowledge.
Can you become a millionaire just by investing? ›
Becoming a Stock Market Millionaire Is Indeed Possible, but It Requires a Combination of Strategic Thinking, Risk Management, and a Long-Term Perspective. It's About Planting the Seeds of Investment and Patiently Nurturing Them as They Grow into Mighty Oaks.
How fast can I become a millionaire? ›
This is according to a study conducted by Ramsey Solutions, which is the largest study of millionaires to date. The average age of a millionaire is 49 years old, which means it takes them over 27 years of saving and investing to reach this status.
How to get wealthy fast? ›
How To Get Rich
- Start saving early.
- Avoid unnecessary spending and debt.
- Save 15% or more of every paycheck.
- Increase the money that you earn.
- Resist the desire to spend more as you make more money.
- Work with a financial professional with the expertise and experience to keep you on track.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
Can I become a millionaire in 5 years by investing? ›
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.
How much do I need to invest to make $1 million in 10 years? ›
In order to hit your goal of $1 million in 10 years, SmartAsset's savings calculator estimates that you would need to save around $7,900 per month. This is if you're just putting your money into a high-yield savings account with an average annual percentage yield (APY) of 1.10%.
