Believe it or not, becoming a millionaire (in dollar terms) is a goal that can be achieved. You just have to start saving and investing early on, becoming a millionaire might not be as hard as you think. You just need a game plan, actual steps to get there by starting to save early and being mindful of every dollar you spend.
The easiest way to build your savings is to start early. Doing so lets you take advantage of the power of compounding interest rate. When you put money aside in savings, that money earns interest. As your money grows, the interest you’re earning earns interest. The more time you have to save, the more you can rely on compound interest to help you increase your savings. Even if you did not start to save early, though, start saving today. The sooner you begin, the sooner you can grow your money.
The reason why we make use of dollar value is because of the possibility of devaluation of naira. Judging from precedence, naira devaluation has led to a reduction in purchasing power and standard of living in Nigeria, over the last decade the naira has been devalued twice (from 120 – 200 – 360).
If you’re putting away $415 (N149,400) a month starting in your 20s, $651(N234,360) a month starting in your 30s or $1,300(N468,000) starting in your 40s, and getting a 6 percent annual rate of return on your savings, you’re on the right track to hit that milestone of one million dollars by 67.
If you’re starting from scratch with zero savings, you need to save $2,200(N792,000) a month to become a millionaire by January 2039.
The reason why we make use of dollar value is because of the possibility of devaluation of naira. Judging from precedence, naira devaluation has led to a reduction in purchasing power and standard of living in Nigeria, over the last decade the naira has been devalued twice (from 120 – 200 – 360). As a seasoned investor/saver, you should aim to be rich in dollar terms as the dollar is the currency to which all other currencies are benchmarked and it has proven unsinkable and stable. By so doing, you will be eliminating currency risk.
Bottom Line, how much you actually earn depends on how well your investments do. At younger ages, you have the time to be a little riskier with your investments and seek out choices that have the potential to get you higher returns (high returns comes with higher risks), hence there is a potential to lose your money. Where and what you invest in is also equally important, the focus should be low risk investments.
The key is to start while you’re young, stay disciplined, and make and keep a long-term financial plan. The ride may be slow, it may require you live a minimalist lifestyle for the most part, but you’ll be pleased with the long-term results. Making your first million won’t be easy—but it doesn’t need to be impossible.