Are you wondering how to become a millionaire and secure one million euros through market investment? It's a dream many have, and with the right approach, it's achievable. In this blog, we'll delve into calculating the monthly savings required to become a millionaire in 10, 20, 30, or 40 years.
Becoming a millionaire doesn't happen overnight, except perhaps by winning the lottery. "Slowly but surely" is the mantra that best suits this goal. Slowly, because it's a mission spanning several decades, and surely, because with rigor and discipline, the chances of accumulating one million euros are fortunately high.
With rigor and discipline, you can rely on a special ingredient, a wealth accelerator: compound interest. This mechanism reinvests interest earned on a capital year after year, allowing that capital to grow exponentially over time. It's a compelling argument for the aspiring millionaire.
To achieve both high and stable returns, the stock market is essential. The word “market” is very important here, because it is not a question of betting on a few stocks with high potential: this strategy would be far too risky in the long term. Diversification is crucial for becoming a millionaire. Investing in stocks through a global equity ETF allows you to benefit from the overall market performance, reducing the risk of volatility.
With an investment horizon of several decades, the equity component should be predominant in an investment portfolio. Our simulations are based on a portfolio composed of 89% global equities, 9% eurozone government bonds, and 2% cash.
Discipline in investment requires two types of effort: staying invested throughout the period and investing regularly. Regular investment is also a good risk management strategy, minimizing the impact of volatility and reducing the stress of timing the market.
Not everyone can invest at the same pace. To reach the one million euro goal, we present a matrix that indicates the monthly effort required based on your initial investment (between €10.000 and €100.000) and your investment horizon (between 10 and 40 years). These amounts correspond to projections for a median scenario, that is to say for which you will have a 50% chance of arriving beyond the objective of one million euros and a 50% chance of arrive below a million euros.
Over 10 years | Over 20 years | Over 30 years | Over 40 years | |
---|---|---|---|---|
Initial investment: | Monthly effort: | |||
€100.000 | €4.404 | €1.271 | €300 | €0 |
€50.000 | €4.913 | €1.618 | €597 | €166 |
€40.000 | €5.014 | €1.688 | €656 | €221 |
€30.000 | €5.117 | €1.757 | €716 | €276 |
€20.000 | €5.219 | €1.827 | €775 | €331 |
€10.000 | €5.320 | €1.896 | €834 | €386 |
The contrast in the monthly effort required for horizons below or above 20 years is striking. Beyond this point, the dream becomes much more attainable with three-figure savings levels, or even below €500 per month, regardless of the initial investment, for a 40-year investment horizon. If you're in your forties and a million is your retirement goal, it's time to wake up!
Note that the figures in the table above are derived from simulations and assumptions of future market returns and are not a guarantee of results. All investments involve risks and may result in losses. Also, due to inflation, 1 million euros today will probably not confer the same purchasing power in 20 or 40 years.
Procrastination is your worst enemy when it comes to investment. Don't wait any longer to set your goal and start your investment routine! Use our website to simulate, get in touch with one of our managers, and increase your chances of becoming a millionaire... soon enough to truly enjoy it.