To help you visualise your saving and investing goals, I have produced the chart below which shows you how many years it will take you to save a million pounds.
The two key factors that will determine how long it will take to become a millionaire are:
- How much you are able to save each month
- The level of interest or return on investment that you are able to earn on your savings
Obviously the more you save each month and the higher the return on investment, the quicker it will be for you to become a millionaire, so it is important to try and save as much as your income as possible and get the best savings / investments that you can.
(Click on the image below to see full size. You are welcome to save the chart on your PC by right-clicking the image, then clicking on ‘Save Picture As’)
Planning to Retire Early?
This chart is really useful in helping you to plan your long-term financial goals. For example a thirty year old looking to retire in his early fifties can see that it would take 23 years to become a millionaire if he were to save £750 per month and achieve an annual return on investment of 12%.
Therefore by the age of 53 he would have a million pound pension, paying out £120,000 per annum (12% return).
If he is unable to save as much as £750 per month or get such a high return on investment, he may need to save for longer, consider retiring on a lower income or try to find ways of increasing the amount he is capable of saving, such as increasing his income or using money saving ideas to cut costs.