“Who wants to be a millionaire” as the famous song went.
And who wouldn’t want to be a millionaire? Money can’t buy you love or happiness, but poverty or debt can certainly make you miserable.
But practically speaking, just how long would it take and how much would you have to save to reach the magic million?
Using the calculator at the foot of the page will allow you to chart just that. To achieve this sum of money, this calculator takes into account monthly premiums, with the option of a lump-sum payment, growth or interest rates, and plan charges.
It is assumed that you will invest your money in some sort of UK investment vehicle (an ISA or a pension).
Here are some charts to get started. Based on different rates of growth (5% and 7% are reasonable growth figures that you may expect to see in a long term investment). However this illustration and calculator are just for fun – there are no guarantees in the world of investing. And inflation or fund charges have not been included in these illustrations.
5% Growth Rate
If you assume a growth rate of 5% over the life of the plan, to be a millionaire in 40 years, you would have to put away £660 every month. If you’re lucky enough to have money for a lump sum of £50,000 for example if you are left money or have money from the sale of a house, you could reach a million in the same timeframe by putting away £420 per month,
Up your monthly premiums to £2,000 however, and you will almost half the time to becoming a millionaire.
7% Growth Rate
Let’s assume a more generous growth rate of 7%. And as you can see, even a shift upwards of 2% can change things quite a bit. From a standing start, putting away £380 for 40 years would get you to the million mark. With a £50k lump sum, however, you will only have to put away £70 a month for 40 years to accrue £1 million. Up your premiums and the timeframe more than halves and you could see £1million in under 20 years, depending on your lump sum payment.