Becoming a millionaire

Cool topic eh?

Or is it catchy?

Well...I hope it is....

So the question is....how do I become a millionaire or how would I be able to achieve that solid RM1mil mark?

There are few ways....

1) Business....
2) Savings..
3) Lottery...
4) Robbery..
5) Corruption...
6) Swindle...
7) Keep on dreaming......
8) Property investments.....
9) MLM.........

Well....saying and writing it easy (in theory that is)....and I'm gonna touch on being a millionaire through savings and compounding.....I don't think writing about becoming a millionaire through other channels will be right for the current moment and of course, almost everyone knows that investing in properties will certainly help ...heheheh.....So here we go...

Let's assume we have a savings of RM1500 and we want to have RM1,000,000 in 14 years time. So how much do we have to save a month or a year to get that RM1mil. Let's be conservative and assume that the annual interest rate will be constant at 7.5%.

According to the Compound Interest Calculator, you will need to save RM3,333.33 per month or RM40,000 per annum for the next 14 years to achieve that mark.

Let's take another example, Abu is 34 years old. He plans to retire at 55 and planning to have RM1.5mil as his retirement savings. So how much does Abu has to save from now so that he will able to attain his financial objective?

Again, assuming an annual interest rate of 7.5%, he needs to save around RM2,460 per month for the next 21 years or RM29,500 annually.

Play around with the calculator at the link and you'll be amazed with the power of compounding.

Let's take a look at another example. Assuming you open up a new ASB fund for your soon to be born kid. Every month from the day she or he was born, you put RM200 until she or he is 21 years old. If you do that constantly, at the age of 21 and assuming an annual interest rate of 7.5%, your kid will have about RM92k worth of savings. A good way and amount for him or her to start their life. I wished I had such kind of start but there's no point looking at the past kan?

Again, all of this looks rosy in writing and in theory and I admit that sometimes, it can be difficult to do it in reality. Whatever being said though, it all depends entirely on what do we want to achieve in life. For some, they couldn't be bothered at all and for the other some, they have made the necessary preparations to face the future uncertainties.

I will be very happy if I could save RM20,000 per year. If I do that consistently over the period of....let's say 14 years, I may have about RM500k. Will I do it?....I'll try but my main aim is always to ensure to I'll have sufficient funds to use when the time comes.....

So for those who wants to be a millionaire, good luck and start saving (duhhh).....

psssstt...just assume you have Rm5k in hand, where would you put your money to? ASB or Unit Trust?