## Strategy to Shorten the Time to be a Millionnaire

In the previous section, you have learned that it is possible for you to become a millionnaire. In this section, you will learn how to shorten the time to become a millionaire.

Say, you are willing to invest \$20 every month in a stock or a bond that on average the growth is about 1% a month. My question is simple: when are you going to become a millionaire?

In how many months (or years) you will be able to accomplish your goal to become a millionaire?

To see more detail, look at the chart and the spreadsheet on when your investment will be more than a million dollar.

You will be able to pay reach your 1 million goal in 625 months, or 52 years.

That is why you need to start early in your investment. At least, start to educate your children to invest.

But I am too late to become millionaire, you may say. Is it possible to become a millionaire earlier than 52 years?

If you want to reach your goal to become millionaire earlier than 52 years, there are three methods.

• You increase your monthly investment, or
• You find better investment than just 1% interest rate, or
• You put initial investment (rather than zero).

Which of the three methods is the best way to reach the goal of becoming a millionaire in shorter time?

Say, you put initial investment of \$1000, double the interest rate into 2% per month and double your monthly investment into \$40, how long will you need to invest in order to become a millionaire?

Table below can be obtain from the spreadsheet tool that you have made.

 Your investment How long to become a millionaire? Base Scenario: \$0 initial investment, 1% monthly interest, \$20 investment per month 52 years (625 months) Scenario 1: \$1000 initial investment, 1% monthly interest, \$20 investment per month 48 years (585 months) Scenario 2: \$0 initial investment, 2% monthly interest, \$20 investment per month 29 years (349 month ) Scenario 3: \$0 initial investment, 1% monthly interest, \$40 investment per month 46 years (556 months) Scenario 4: \$1000 initial investment, 2% monthly interest, \$40 investment per month 24 years (294 months)

Clearly, the combination of the three methods above will produce the best results. You can cut the time to become a millionaire to a half (from 52 years to 24 years).

Among the three methods above, higher percentage of interest rate is the best way to reach your goal in shorter time.