Many people believe the only way to become rich is to be born to a wealthy family or win the lottery. But does it always take money to make money?
We found it’s not quite true — there is a way to build a million-dollar account by age 65 without being filthy rich in the beginning.
In order to become rich, you should start investing — the sooner the better. According to financial adviser David Bach, “Becoming rich is nothing more than a matter of committing and sticking to a systematic savings and investment plan. You don’t need to have money to make money,“ David writes in his book Smart Couples Finish Rich. ”You just need to make the right decisions — and act on them.”
To demonstrate the possibility of creating wealth, Bach created a chart showing how much money you need to save each day, month, or year to have $1 million in your bank account by the time you turn 65. The chart assumes you’re starting with zero dollars invested, and it also assumes a 12% annual return.
Although the numbers in the chart are not exact (for simplicity reasons, it does not take into account the impact of taxes), they give you an idea of how saving a few dollars each day can make a huge difference over time, especially if you start saving money at an early age.
So the next time you decide to spend a couple of bucks on knickknacks, remember this chart and consider redirecting that cash to your savings.