By paul.huber@home.com (Paul M. Huber)
March 30, 2000

"Who Wants to Be a Millionaire?" is the name of a popular show on television. Of course, this is a rhetorical question -- all of us want to be a millionaire, right? Just think: If you had a million dollars, all of your financial worries would be over. You could enjoy the good life. No more working for a living. You could pursue your hobbies and other interests.

Becoming a millionaire is a good goal. But how realistic is that goal? How could you possibly become a millionaire? Let's take a look.

You could send off a letter to the TV show "Who Wants to Be a Millionaire?" But what are your chances of being selected to appear on the show? And then there's the extra hurtle of answering all the questions correctly. This hardly seems like a sure bet for millionaire status.

You could buy tickets for the state lottery. But what are your chances of actually winning? Well, the ticket I recently bought had a notice that stated the odds were 1 in 7.1 million. That hardly seems like a sure bet.

Then there's inheritance: Maybe you have a rich relative who will leave you a million-dollar estate. Are any of your relatives worth a million dollars? Would you have to split it with others? And don't forget taxes. You say you don't have a relative worth a million dollars? Ah, well.

Then of course there's the old fashioned way to become a millionaire: saving and investing. But is this really possible? Let's run the numbers!

Let's say that at age 25 you start investing $2,000 per year (this is $167 a month) into your employers 401(k) retirement plan, or your own Individual Retirement Account (IRA). The retirement account is invested in an S&P 500 stock index mutual fund that earns 11% a year -- the historical average. You continue to do this for the next 40 years (age 65). You will have invested a grand total of $80,000, and saved on income taxes, too.

Guess what? At the end of the 40 years you will be a millionaire. If a husband and wife both invest $2,000 per year for a total of $4,000, they will amass more than $2 million.

So what is the cost of waiting? Start at age 30 and you'll have under $700,000 at age 65. Wait until age 35 and you will have about $400,000. Wait until age 50 and you'll have almost $70,000. Starting early is a lot better than starting later.

Conclusion: If you start early enough, you can become a millionaire in your lifetime. In fact, you'll have to decide NOT to become a millionaire by not saving and investing.