How much money you need to save each day to become a millionaire by age 65

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If you want to get rich, start investing — and start as early as you possibly can.

“Becoming rich is nothing more than a matter of committing and sticking to a systematic savings and investment plan,” financial adviser David Bach writes in his book “Smart Couples Finish Rich.”

“You don’t need to have money to make money,” he writes. “You just need to make the right decisions — and act on them.”

To illustrate the simplicity of building wealth over time, Bach created a chart (which we re-created below) detailing how much money you need to set aside each day, month, or year in order to have $1 million saved by the time you’re 65.

The chart assumes you’re starting with zero dollars invested. It also assumes a 12% annual return.

The simplest starting point is to invest in your employer’s 401(k) plan, points out Ramit Sethi in his New York Times best-seller, “I Will Teach You To Be Rich” .  Next, he says, consider contributing money toward a Roth IRA or traditional IRA, individual retirement accounts with different contribution limits and tax structures.

While the numbers in the chart below are not exact (for simplicity, it does not take into account the impact of taxes, and 12% is a high rate of return), they give you a good idea of how coming up with a couple of extra dollars each day can make an enormous difference in the long run, particularly if you start saving at a young age.

Next time you consider running to Starbucks for a $4 latté, think about this chart and consider redirecting that coffee cash to your savings:

bi_graphics_building a million-dollar retirement account

This article original Appeared on How much money you need to save each day to become a millionaire by age 65:
http://www.businessinsider.com/build-a-million-dollar-retirement-account-2015-7

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Reader Interactions

Category: Blog, Featured
Posted On: Monday, May 9, 2016

Comments

    • Gretchen with Team Bach says

      Thanks Austin! Hope you enjoy more insights and get your FREE copy of the expanded and updated version of The Automatic Millionaire (plus shipping and handling). Get your free copy HERE!

  2. Russell Maurice says

    Really informative chart! I’m teaching my 17 year old the automatic millionaire method and charts like this one get through to him quickly without much explanation from me!

    • Gretchen with Team Bach says

      Great to hear Russell, glad you’re starting this financial education with your 17 year old now!

  3. Sharon Lynch says

    This is perfect for my two kids- 22 and 24. It is short and sweet and to the point. Retirement is not on either of their minds right now but I am 51 and looking right at it!
    I will use this to show them what a small amount can add up to!

    Thank you!

    • Gretchen with Team Bach says

      THANK YOU for checking out the blog and putting things into practice. Be sure to sign up for the “Finish Rich Quickstart” here on the blog to help support you and your kiddos.

  4. Kesha Russ says

    Thank you for the wonderful information. Where do you find an investment that gives a 12% return of what types of investments would yield 12% return. Thanks

    • Gretchen with Team Bach says

      Thank you, Daisy, glad you’re here! Is there anything specific you find amazing? Would love to learn more what’s helping you. Thanks!

  7. Jeffrey says

    The idea of creating wealth here is nothing new or revolutionary. Unfortunately many folks do not place wealth creation as a priority. There is also a lack of financial education in our school systems today. If people knew more about finance, they might be able to make more intelligent decisions. I do find the idea of a 12% yearly return absurd and unrealistic, especially in light of today’s economy.

  8. Brenda says

    I love the Automatic Millionaire Book. I refer to it every now and again and have even bought for a few people even though I am frugal. Thanks David! Not sure If I will be a millionaire but at least I am putting away a bunch and I “made it automatic” of course.

    • Gretchen with Team Bach says

      Can’t thank you enough for sharing The Automatic Millionaire, that’s terrific Brenda! And making it automatic is the key. Keep up the great work!

  9. Mac says

    Well, I’m 57 and there is no way I can save $156 per day. Guess I’m screwed if I want to retire rich, but I never had any dreams of being able to retire or being rich in the first place. Great advice, but too late… I’ll unsubscribe (again) from your mailing list. This time make it permanent, please.

    • Gretchen with Team Bach says

      I am so sorry you didn’t find this helpful. Perhaps the book “Start Late, Finish Rich” may be a better and more complete read to help you at this point. It offers more than 1 blog post can do! While we are sorry to see you leave our mailing list, be sure you hit unsubscribe from the bottom of the email otherwise you will remain on the list. Good luck to you and your financial future!

  10. Todd says

    Thanks David for teaching the power of compounding, and the power of consistency. Do you have any resources for young adults just coming out of high school or college?
    Thanks again!

    • David Bach says

      Your welcome Todd! Yes, the best resource I have is the updated edition of The Automatic Millionaire. Which you can get right now here at this link for free with shipping and handling. This is the book all young people need to read. Thanks for considering it…

      Sherry says

      May 23, 2016 at 5:47 am

      I’d like to see some calculations like this based on a more realistic rate of return. Even good index funds have been lucky to see more like 8% over the past few years.

    • Angus says

      And what if any products or savings implements yield a 12% annual return? Most I have seen can’t promise anything and historically don’t yield more than 7-8 %.

    • Mike says

      I own ALL of Mr. Bach’s books and have read them multiple times. I’m looking forward to his latest update! If all goes as planned, i’ll be able to retire in about 8 years at the age of 50!

      • Gretchen with Team Bach says

        That’s awesome Mike, so glad you’re on track for an early retirement! Thanks for sharing!

      • Gretchen with Team Bach says

        So glad you’ve found the tools easy to implement! Feel free to share your progress!

      • Gretchen with Team Bach says

        HI Bruce! Glad to hear you’d like a book. Please go to this link for all the ordering information. Thanks so much!

    • Marcelle says

      I have always enjoyed David’s Books. Keep them coming. I am enjoying the blogs as well. I think I needed the wake-up call. I am a saver but I needed a new perspective.

      • Gretchen with Team Bach says

        Glad David’s new blog and site can be a wake-up call. Lots of great content and happy to hear about your new perspective Marcelle!

    • Ruby says

      I’m a 53 year old woman and live in London, UK.
      I have £38,000 worth of debt(I’m in a debt management plan), have a flat with a big mortgage on it which I rent out (and I lodge in cheaper accommodation) and, short of a miracle, can’t see me ever paying off. I have no savings and no pension of any consequence – am I beyond help David!
      By the way, I’m single and have no dependents.

    • Bryan says

      I have alway enjoyed your books. We have a hard time controlling our spending. But I have been able to set up a positive savings – 401k, pension, military retirement, and wife’s pension. Thanks so much

      • David Bach says

        Bryan thank you for saying hi today. Really excited to hear from you. I’m so glad things are going well for you and you’ve made progress. Keep it up!

    • Kim says

      I enjoyed watching the video with you and Marie. It made me think about your challenges. I’m adding to my 401K and look forward to receiving your book.

      • Gretchen with Team Bach says

        Congrats Kim, great job on adding to your 401K! And, glad you enjoyed the Marie video, we love her too! All the best!

      • David Bach says

        Thanks Jack! I appreciate the kudos, and I’m happy you came by to say hello.

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        Thanks, so glad you’re getting the info you need from the site!

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        Thanks Madeline, we’re so glad you’re finding the content useful!

      • Gretchen with Team Bach says

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      There are some interesting time limits on this article but I don’t know if I see all of them heart to heart. There is some validity however I will take hold opinion until I look into it further. Good article , thanks and we would like extra! Added to FeedBurner as well

    • Anne says

      Someone I know is in dire financial straits, is middle-aged and unemployed, but amazingly has an excellent credit rating (this person is very conscientious about paying debts). (S)he is deeply depressed, mainly about money issues. Aside from getting medical help for depression, what advice can you give about money issues and employment?

      • Gretchen with Team Bach says

        Glad to hear you enjoyed the blog post. Share your progress with us when you can!

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      • Gretchen with Team Bach says

        Thank you so much for your comment, glad you find the site and article useful! If you’re interested, sign up for our free newsletter and get more current tips! Look forward to hearing more about your progress.

    • Dominique says

      Howdy just wanted to say hi. The words in your post seem to be running off the screen in Internet explorer. I’m not sure if this is a format issue or something to do with web browser compatibility but I thought I’d post to let you know. The layout look great though! Hope you get the issue resolved soon. Many thanks!?

    • Eric Tomlinson says

      David –

      I started after reading your “Automatic Millionaire” book about 10-12 years ago. I’ve followed the principles and despite taking care of a family of four on a military salary, I am a bit over one third of the way there in a bit over ten years. Thanks for the motiviation.

      Best regards,

      ET

      • Gretchen with Team Bach says

        That’s amazing! I am so thankful I was able to take part in helping a military family take steps to best care for their family and make long term plans. Thank you so much for letting me know- and keep going!

      • Gretchen with Team Bach says

        Thank you so much, so glad you enjoyed it. Stay tuned for more and in the meantime be sure to sign up for our newsletter for some other articles you may like.

    • Rochelle says

      Wow I saw how much I have to save to be a millionaire by 65. I read the automatic millionaire in my 30’s I guess if I had taken it seriously and not listened to what the broke people had to say I would be a millionaire by now. So I’m starting late, I will finish rich.

      • Gretchen with Team Bach says

        We are so glad you found this helpful! Be sure to check out our book Start Late, Finish Rich for more help!

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