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.
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FAQs
The time it takes to become a millionaire depends on how much you save and the return you get on your money. If you invest $1,000 per month and get an 8% annual return, you'll be a millionaire in 25.5 years. The key to being a millionaire is to start investing right away and to be consistent about it.
How long does it take to become a millionaire through investing? ›
The time it takes to become a millionaire depends on how much you save and the return you get on your money. If you invest $1,000 per month and get an 8% annual return, you'll be a millionaire in 25.5 years. The key to being a millionaire is to start investing right away and to be consistent about it.
How fast can you make a million dollars investing? ›
Suppose you're starting from scratch and have no savings. You'd need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate. For a rate of return of 5%, you'd need to save around $14,700 per month.
Can investing make you a millionaire? ›
Investing in the stock market remains one of the most tangible ways to become a millionaire. It is available to everyone, and it does not require luck, a rich family background or entrepreneurial genius. The only differentiating factor is the number of years it takes every individual to get to those million dollars.
How fast can you make money by investing? ›
On average, stocks have given an annualized return of around 10%. At that rate, your money doubles every 7.2 years. Let's say you start with $10,000. After a 40 year career, that turns into at least $320K from doubling 5 times.
Can you get rich fast with stocks? ›
Making money in stocks doesn't happen overnight. Some people day trade and try to turn a quick profit, but day trading comes with additional risks. Most financial advisors will tell you that you should invest only money that you won't need for at least five years.
How much money do I need to invest to make $4000 a month? ›
Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.
How much will I have if I invest $300 a month? ›
If you invest $300 each month, that comes out to $3,600 over the course of a full year. And after 30 years of investing, that would total $108,000. But with the power of compounding, your portfolio's value could rise far higher than that.
How to turn 100K into $1 million fast? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years.
Is investing the easiest way to get rich? ›
Investing in the stock market is one of the world's best ways to generate wealth. One of the major strengths of the stock market is that there are so many ways that you can profit from it. But with great potential reward also comes great risk, especially if you're looking to get rich quick.
Day Trade. If you're a nimble and proficient trader, probably the “easiest” way to make fast money in the stock market is to become a day trader. A day trader moves in and out of a stock rapidly within a single day, sometimes making multiple transactions in the same security on the same day.
How fast can you become a millionaire? ›
Invest early and consistently
If you start putting away $300 a month beginning at age 25, assuming an 11% rate of return, you could be a millionaire by age 57. If you kept on investing and retire 10 years later, you'd be sitting pretty on a $3.2 million nest egg.
How much do I need to invest to make $1,000 a month? ›
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.
How to turn $1000 into $10000 in a month? ›
6 Ways to Turn $1000 into $10000
- Invest in Real Estate.
- Invest in Stocks and ETFs.
- Get Out of Debt Now.
- Start an Online Business.
- Retail Arbitrage.
- Invest in Yourself.
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.
How much do I need to invest to be a millionaire in 20 years? ›
For example, it takes $1,400 per month to reach $1 million in 20 years. However if you can find 30 years to save, it only takes $475 per month to reach the same goal. This isn't easy, but finding the extra time may be easier than finding an extra $12,000 per year.
How long will it take to turn 500k into $1 million? ›
If invested with an average annual return of 7%, it would take around 15 years to turn 500k into $1 million.
How long does it take 100k to turn into 1 million? ›
Over the long haul, the stock market has provided average annual total returns somewhere in the neighborhood of 10%. If the future ends up like the past, $100,000 would grow into $1 million in just over 24 years from compounding alone.
