The Millionaire Plan
Bottom Line: As part of my series, Eight Rules for Life, here’s my Millionaire Plan.
It is absolutely true that the average American, making the average full-time income can become a millionaire within 25 years & even own a home in the process. It’s just math and a little dedication.
- Average full-time salary: $48,000
- Average net effective tax rate for that salary is 5%
- Net take home pay is $45600 or $3800 per month
- Average monthly mortgage payment is $1150 leaving $2650 for everything else
Now, if you want to be a millionaire take $1000 per month and invest wisely in stock-based investments and voila… On average you’ll be a millionaire within 25 years. How?
The average rate of return in the stock market (S&P 500) is 10% historically,0 so after 25 years at an average rate of return you’ll have: $1,298,181
It's important to note that the $1000 per month is an "all-in" number. For example, if you have an employer that provides a company match on a 401k plan – that counts. For those who throw up barriers or make excuses – it’s true you won’t achieve elevated financial status and reach loftier goals. For the average person in the workforce with dedication and a little good fortune along the way… It’s absolutely possible.