billion_dollars In the past, it was everyone’s goal to become a millionaire by the time they retire, so they wouldn’t have to worry about money. Well folks, the world is changing, and a measly million bucks isn’t likely to carry you through retirement. Unless you like eating rice and beans everyday, that is. Most of us want to retire in style, without worries about silly things like money. How much is enough? No one knows for sure, since every’s situation is a little bit different. With that in mind, I’ve decided on a cool $1 Billion as they target by age 60. $1 billion isn’t likely to run out on you, no matter how free of a spender you are. So, how can you make it to a billion? Let’s take a look:

Starting at age 26

If you start investing at the ripe young age of 26 ( that’s how old I’ll be in a few months ), then you have 34 long years to enjoy the magic of compound interest. Assuming you earn an average return of 10% per year ( shouldn’t be difficult if you stick with low-cost index funds ), then you must save $308,700 per month until age 60. At that point you will have just over $1 billion in your brokerage account.

Starting at age 35

If you putt off your grand investment plans until age 35 ( or if you’re already at that age ) things don’t look quite as rosy. To reach your $1 billion goal by age 60, you’ll need to sock away $693,900 every month. That’s over double the amount required if you start at 26 - that’s the power of compound interest.

What can you do?

Not everyone can afford to invest $693,900 per month - and that’s why you need to start early. If you start at 26, your monthly investment is much more reasonable. If you cut back in a few areas, I don’t see any reason why you can’t invest a measly $308,700 each and every month in your brokerage account.

That’s a little much

Ok, ok, perhaps not everyone can come up with $308,700 to invest monthly. If you can manage $280 per month in the same investment, you’ll still wind up with a cool million bucks. While they won’t carry you through retirement, it’s not a bad start. Oh, and the clock’s ticking.

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