Through the magic of compounding returns, the average American is capable of becoming a millionaire, simply by investing money on a regular basis in the stock market. In Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies Jeremy Siegel, an economics professor at the Wharton School at The University of Pennsylvania proves that long term, stocks have offered the best returns and the greatest hedge against inflation of any financial asset and have averaged a 7 percent (inflation adjusted) real return on investment over the past 200 years.
So how much must we invest in our portfolios to become millionaires?
It depends on your age, risk tolerance, and investment performance, but here's a great summary of how much you need to invest per month to save a million dollars by age 65 (if you haven't saved a dime).
- Age 25: $286 a month.
- Age 35: $671 a month.
- Age 45: $1,698 a month.
- Age 55: $5,466 a month.
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Photo By: Will Clayton