How to save one million dollars

Read one article about personal finance and you know that compound interest is one of the most important reasons to start saving and investing early.

Well, in theory. You’ve heard that if you start investing in your 20s, you’ll have a bajillion dollars more than you will if you start in your 30s. Or something like that.

It is true that starting early helps build more money.

Take this simplified example:

Let’s say you’re 25 and you start putting $3,000 annually into an account for the next 40 years, with a seven percent annual return. You’d contribute a total of $120,000 by the time you’re 65—but your account will have ballooned to almost $700,000.

Now let’s say you wait until you’re 35. Even if you contributed $5,500 per year, rather than $3,000, until you’re 65 with seven percent annual returns, you’d end with just under $600,000.

Start early, put away less each year, and you end up with $100,000 more. Not bad.

Ok, that’s all well and good, but what does that actually look like? This video will help you visualize the difference. We’ve laid out the steps for the best ways to save and benefit from compound interest so that by the time you retire, you could be a millionaire. It’s not a bajillion dollars, but it’s not half bad.

If you're unsure where to begin, a solid financial plan will help you identify your expenses so you can carve out enough to save each month and watch your nest egg balloon!