Saving Your First $1 Million. How Much You Need Per Month To Be A Millionaire in 5, 10, 20, 30 years?
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Saving Your First $1 Million. How Much You Need Per Month To Be A Millionaire in 5, 10, 20, 30 years?

profileMing Feng
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Who Wants To Be A Millionaire?

There are 269,000 millionaires in Singapore as of the year 2019.

I'm rich
Source: giphy

This number is projected to increase to 363,000 millionaires by the year 2024.

With 94,000 millionaires position “up for grab”, we did a bit of calculation to see how we can move towards “chope-ing” our position as a millionaire!

Chope
Source: Youth.sg

The previous time we talk about how much you need to save each month to save $100,000 in Singapore.

If you have yet to save $100,000, here’s the article that can help you do so:

saving $100,000 in 3,4,5 years

If you managed to meet your target, it is about time to up the level a little.

Let’s Aim To Be a Millionaire!

We understand that the route to your first million can be challenging.

Also, in the context of Singapore, some of us are asset rich with our Built-to-order (BTO) or property. In this case, we are going to assume that we want to have a million-dollar worth of liquid money. Nothing beats money in the bank anyway!

Millionaire
Source: giphy

As all of us are in various life stages, we will assume a few initial savings amount:

  • Initial Savings: $0
  • Initial Savings: $100,000
  • Initial Savings: $200,000
  • Initial Savings: $500,000

We will also look at the various time horizon required:

  • 5 Years
  • 10 Years
  • 20 Years
  • 30 Years

The Route to Saving a $1 Million Dollar

Depending on your saving rate, using the average annual salary in Singapore at $67,152, and assuming 0% interest rate, here’s how long you need to save your first $1 million.

Savings RateIncomeAnnual SavingsTargetYears to $1 million
5%$67,152.00$3,357.60$1,000,000.00297.8
10%$67,152.00$6,715.20$1,000,000.00148.9
15%$67,152.00$10,072.80$1,000,000.0099.3
20%$67,152.00$13,430.40$1,000,000.0074.5
25%$67,152.00$16,788.00$1,000,000.0059.6
30%$67,152.00$20,145.60$1,000,000.0049.6
35%$67,152.00$23,503.20$1,000,000.0042.5
40%$67,152.00$26,860.80$1,000,000.0037.2
45%$67,152.00$30,218.40$1,000,000.0033.1
50%$67,152.00$33,576.00$1,000,000.0029.8
55%$67,152.00$36,933.60$1,000,000.0027.1
60%$67,152.00$40,291.20$1,000,000.0024.8
65%$67,152.00$43,648.80$1,000,000.0022.9
70%$67,152.00$47,006.40$1,000,000.0021.3
75%$67,152.00$50,364.00$1,000,000.0019.9
80%$67,152.00$53,721.60$1,000,000.0018.6
85%$67,152.00$57,079.20$1,000,000.0017.5
90%$67,152.00$60,436.80$1,000,000.0016.5
95%$67,152.00$63,794.40$1,000,000.0015.7
100%$67,152.00$67,152.00$1,000,000.0014.9

This means that even if you save 100% of your salary, you will still need about 15 years to be a millionaire!

That doesn't make sense
Source: meme generator

Factoring in Interest Rate or Return on Investments

saving your first $1 million

To break it down into how much you need to save each month to achieve your target within certain years, we lay out two assumptions:

  • You save or invest a fixed amount every month
  • Constant annual returns % per annum with interest compounded at the end of each year

We will be using some of the familiar percentage and products that Singaporeans are more familiar with:

Saving a Million Dollar in 5 Years

Interest Rates/ ReturnsHow Much You Need to Save Per Month to Save $1 Million in 5 Years
Initial Savings: $0Initial Savings: $100,000Initial Savings: $200,000Initial Savings: $500,000
0.5%
(eg. deposit accounts)
$16,490.13$14,841.12$13,192.10$8,245.06
0.9%
(eg. Singapore Savings Bond)
$16,349.68$14,714.72$13,079.75$8,174.84
2.0%
(eg. Cash management accounts)
$15,967.10$14,370.39$12,773.68$7,983.55
2.5%
(eg. Cash management accounts)
$15,794.97$14,215.47$12,635.98$7,897.49
5.0%
(eg. CPF SA)
$14,951.18$13,456.06$11,960.94$7,475.59
8.0%
(DIY)
$13,976.30$12,578.67$11,181.04$6,988.15

Saving a Million Dollar in 10 Years

Interest Rates/ ReturnsHow Much You Need to Save Per Month to Save $1 Million in 10 Years
Initial Savings: $0Initial Savings: $100,000Initial Savings: $200,000Initial Savings: $500,000
0.5%$8,159.00$7,343.10$6,527.20$4,079.50
0.9%$8,021.02$7,218.92$6,416.82$4,010.51
2.0%$7,648.46$6,883.61$6,118.76$3,824.23
2.5%$7,482.50$6,734.25$5,986.00$3,741.25
5.0%$6,685.44$6,016.90$5,348.36$3,342.72
8.0%$5,802.94$5,222.65$4,642.35$2,901.47

Saving a Million Dollar in 20 Years

Interest Rates/ ReturnsHow Much You Need to Save Per Month to Save $1 Million in 20 Years
Initial Savings: $0Initial Savings: $100,000Initial Savings: $200,000Initial Savings: $500,000
0.5%$3,994.16$3,594.75$3,195.33$1,997.08
0.9%$3,859.05$3,473.14$3,087.24$1,929.52
2.0%$3,501.21$3,151.09$2,800.97$1,750.61
2.5%$3,345.40$3,010.86$2,676.32$1,672.70
5.0%$2,632.89$2,369.60$2,106.31$1,316.45
8.0%$1,926.18$1,733.57$1,540.95$963.09

Saving a Million Dollar in 30 Years

Interest Rates/ ReturnsHow Much You Need to Save Per Month to Save $1 Million in 30 Years
Initial Savings: $0Initial Savings: $100,000Initial Savings: $200,000Initial Savings: $500,000
0.5%$2,606.53$2,345.88$2,085.22$1,303.26
0.9%$2,473.87$2,226.49$1,979.10$1,236.94
2.0%$2,129.95$1,916.95$1,703.96$1,064.97
2.5%$1,984.08$1,785.67$1,587.26$992.04
5.0%$1,355.53$1,219.98$1,084.43$677.77
8.0%$813.57$732.21$650.85$406.78

The speed at which you achieve $1 million in savings can be affected by a few factors:

  • Your current life stage
  • How much salary are you drawing at the moment?
    Based on the above illustrations, some of the monthly savings amount can be difficult to achieve.
  • How much return can you constantly achieve over a long period of time?

If retiring early is your ultimate objective, you can also take into account the savings in your CPF account.

Lastly, compound interest is a ridiculously easy way to help you achieve your goals. That is provided you start as early as possible.

090620-Compound-Interest

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About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
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