When are we going to see our first million?

I think I have neglected this blog but I can’t seem to find anything worthy to say. I always have this great idea after a while, I’ll just think that it’s too immature to be blogged.

Anyway, I did up a life savings plan a few months back. The plan was to save $500 monthly, which is a total of $6000/annum. At 10%  annual compounded rate, I’ll take about 30 years to earn my first million. That’s when I’m 50+? years old?

Wait wait, that is too long. Way too long. So…  I did up this excel table. (For the purpose of the sole discussion of saving up to a first million, let’s assume a world of no inflation.)

First, to speed up my million dream, I have to save more. So what’s an attractive sum? Let’s say $15,000, which sounds a lot but is honestly managable. Back to the $3000 monthly pay, you try to save up $1000 each month and an extra $3000 from your bonus, angpao and whatever windfall.

A $15,000 savings yearly, compounded 10% , your first million will happen in 21 years and notice, the second million occurs at year 27. It takes about 6-7 years to double your money. At 15% annual rate, you will be a millionaire at 40 years old. What I want you to notice is… it only takes you another 5 years to double that. And another to double that $2M. Amazing, isn’t it?

Well, this is hardly a new concept. In fact, this is one of the earliest concept I learnt in finance.

The rule of 72 : To double your money, just divide 72 by the rate of return.

Now now, the next thing we need to worry is… HOW DO WE GET A 10% or 15% return?