Use this calculator to find out how long it will take until you’re a millionaire.
Most of us have the dream of reaching financial independence, and there’s nothing that quite says you’re independent like being a millionaire. Use this calculator to find out how long it’ll take you to become a millionaire with your current savings plan, and how much faster you can get there by adding more to your savings each month and choosing a better interest rate.
The Millionaire Calculator
Source: finder.com.au, estimate of savings over time, based on regular after tax savings, it uses a constant interest rate and does not take into account inflation, debts and other investments you may have.
How do I use the calculator?
The millionaire calculator will help you see how long it‘ll take for you to become a millionaire with your current savings habits. To use this calculator you simply need to input your:
- Savings balance: How much money you have saved so far
- Age: How old you are in years
- Monthly savings (after tax): How much money a month you put away into your savings account
- Annual interest rate: The current interest rate of your savings account.
Once you input those initial fields it will calculate how long it will take for you to become a millionaire and how old you will be when you do.
Using the bonus on the bottom of the calculator, you will be able to work out how long it will take for you to become a millionaire if you increase your monthly savings.
Things you can do to get on the millionaire path
There are a couple of easy ways to supercharge your savings so you get to your savings goal – whether that’s to be a millionaire or just to have funds saved for an emergency.
- Pay yourself first. Set up an automatic transfer which deducts money from your bank account and sends it to your savings account straight after you get paid each month. This forces you to budget with your remaining funds after you’ve set aside savings, rather than allowing you to waste money and then save the leftovers.
- Consider refinancing your home loan If you're paying down a mortgage consider refinancing your home loan to a lower rate. Finding a loan that is 25 basis points lower can potentially save you thousands. For instance, if you have a $300,000 loan for a 30 year term at 5.50% p.a. and refinanced to a loan that was 25 basis points lower you could save around $50 a month in monthly repayments, which is about $17,000 over the life of the loan.
- Compare savings accounts. There are a range of savings accounts to compare from banks, credit unions and building societies. Some will offer high rates for the first few months after opening, and others will offer high ongoing rates as long as you fulfil certain conditions such as regular deposits and no withdrawals. Choose an account with an interest rate scheme which suits you, and ensure that there are no fees to minimise your interest rate earnings. You can compare accounts below.
- Budget. It’s hard to know if you can improve your savings unless you know exactly what you’re earning compared to what you’re spending it on. Today there are apps which can automatically show you areas in your spending which you might need to rein in, such as Pocketbook. Once you’ve identified an expense area you want to reduce, think about ways to be more frugal. If you’re spending a lot of money on food, bring your own lunch to work each day. If you spend a lot of money on petrol and parking each week, take the bus or train to work.
- Embrace frugality. Consider living on the cheap side of things, don’t allow your expenses to blow your budget out of proportion. Get in the habit of saving money and spending less where you can.
- Avoid bad debt. Work your way to pay off any debts that are costing you more in interest and consider debt which will help increase your net wealth, such as investing in property. Ensure you meet with a financial planner before deciding on an investment strategy.