Amassing a $1 million net worth (or more) is a dream of many people because a million dollars represents financial security. And, while it may come as a surprise, most people actually can become millionaires if they start diligently investing in a brokerage account early on in life and allow the power of compound growth to help them amass a large account balance.
But, what if you didn't start investing early? Does there come a point when you actually become too old to have a reasonable chance of becoming a millionaire?
Is it ever too late to reach millionaire status?
The sad reality is, if you wait a long time to start investing, it becomes much harder to become a millionaire. That's because you have less time for your money to grow and you don't benefit as much from compounding interest (which happens when your returns are reinvested so you earn more the next year without any extra effort on your part).
The power of time really does make a huge difference in terms of your ability to become a millionaire, which is why it is so important to do all you can to start investing money when you're as young as possible.
If you start putting away money at age 30, for example, you can become a millionaire by age 65 by investing $307 a month every month and earning an average 10% annual return (which is a reasonable expectation if you invest in an S&P 500 index fund). But if you start investing at 55, your monthly contribution to reach millionaire status by 65 is $5,228.77.
Obviously, one of those savings goals is a lot more feasible than the other. After all, if you avoid credit card debt, live on a budget, and are careful with your money, chances are good you can come up with about $300 a month. But finding over $5,000 is a lot more of a stretch.
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This does not, however, mean that it's impossible to become a millionaire after reaching a certain age. It just becomes harder, or requires you to take a different path to do it.
What if you've waited too long to get started?
If you feel like you've waited too long to start investing, there are a few options available to still become a millionaire.
First and foremost, you'll want to begin investing right away. The longer you wait, the harder it is going to be to hit your target. You should also start looking into any options you have for getting the most bang for your investment buck, like using tax-advantaged accounts and claiming your full employer match for your 401(k).
You may also want to think about other paths to becoming a millionaire besides just putting money into a brokerage account and hoping for the best. If you can increase your income, for example, you may be able to accelerate your savings and invest a substantial amount of money each month. If you can become a skilled investor and pick individual stocks to invest in, you may be able to do better than a 10% average annual return. Or, if you have a brilliant idea, you can start a business and potentially make a million dollars if your company takes off.
The bottom line is, there's no age when you should stop working toward your financial goals or give up on achieving them. You may need to work harder if you waited to start, but it's worth the effort -- and even if you fall short of becoming a millionaire, you'll still be a lot closer to your goal (and a lot better off) than if you didn't try at all.
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FAQs
It is Never Too Late to Build Wealth
Am I too old to become a millionaire? ›
It's never too late for anything, not even to become a millionaire later in life. Sure, it's always better to get into the habit of saving, budgeting and planning early in life — even if just to take advantage of compounding interest.
At what age do most people become millionaires? ›
Sometime around age 50, the average American can now expect a household net worth exceeding $1 million. How did so many 50-somethings become millionaires? Household wealth swelled at a record pace during the pandemic.
Can you become a millionaire after 60? ›
According to Ryan J. Janus, CFP, tax and investment professional at Janus Financial, becoming a millionaire in your 60s takes a lot of the same foundational habits as building wealth at any other age. “Simply put, we want to spend less than we earn and save as much as we reasonably can.
Is 40 too late to become wealthy? ›
But don't give up hope! Even if you're 40 years old with nothing saved for retirement, not only is it possible to build a $1 million nest egg by the time you reach your golden years—it might not be as hard as you think to get there.
Is there a 12 year old millionaire? ›
12-Year-Old Millionaire Pixie Curtis, Who Retired At Age 11, Makes Comeback.
Is 50 too late to get rich? ›
Indeed, it's never too late for anything in life and by following certain rules, you can still get wealthy after 50, experts said. “If you've started saving later in life, don't get discouraged,” said Joe Camberato, CEO of National Business Capital. “Instead, focus on what you can control.
Are most millionaires born or made? ›
79% Of Millionaires Are Self-Made — Lessons From Those Who Built Wealth Without Inheritance. Recent studies have shown that the notion that most millionaires are born into wealth is a myth. Recent studies have shown that the notion that most millionaires are born into wealth is a myth.
What percentage of Americans have a net worth of over $1,000,000? ›
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
At what age are people the richest? ›
A little less than 40% of Americans under 35 own a home as of 2022, per the latest Census data. On the other hand, Americans between the ages of 65 and 74 have the highest median net worth out of all age cohorts, increasing their net worth from a median of $308,800 to $409,900 over the same time period.
The value of the $1 million today is the value of $1 million discounted at the inflation rate of 3.2% for 40 years, i.e., 1 , 000 , 000 ( 1 + 3.2 % ) 40 = 283 , 669.15.
Why is it difficult to be rich? ›
The things that stop us from getting rich aren't just our lack of financial knowledge and lack of economic chances; they also have a lot to do with how we think and act. How we think about money and how we feel about making financial decisions have a big impact on how much wealth we can build up.
What age group are most millionaires? ›
Millionaires — those who have a net worth of at least $1 million —are, perhaps not surprisingly, on the older end. They're predominantly 55 and older; just 2.4% are under the age of 35.
Is starting a 401k at 40 too late? ›
Yes, it's very possible to retire comfortably even if you start saving at 40. Regular contributions to your retirement accounts will go a long way toward making that dream a reality. Take advantage of catch-up contributions after the age of 50.
At what point are you considered wealthy? ›
You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.
Can you become a millionaire by 35? ›
By age 35, Sall and his wife became self-made millionaires. One attributing factor to their success was getting intentional about becoming debt-free early in life. Sall and his wife took on minimal student loans for their education. Sall's wife graduated without any student debt, and Sall had just $12,000.
Is 24 too late to get rich? ›
The point is that it is never too late to be financially successful. And it doesn't matter what ups and downs you have had, you can still succeed financially.
Can I retire at 45 with $1 million dollars? ›
Achieving retirement before 50 may seem unreachable, but it's entirely doable if you can save $1 million over your career. The keys to making this happen within a little more than two decades are a rigorous budget and a comprehensive retirement plan.
How many 30 year olds are millionaires? ›
More data published by Statista suggests two-thirds of US millionaires are 60-79 years old. Another 23% of Americans with a net worth of $1 million or more are 50-59, with a small percentage of millionaires being 40 or younger. Approximately 1.79 million of the 22 million millionaires in the US are under 30.
