Can I Realistically Save $1 Million Dollars in 10 Years?

The average amount that people are usually looking to raise is $1 million. This is a good start to a long-term retirement and a standard that people look upon favorably as they seek to achieve their financial goals. Saving $1 million is possible, but it becomes more challenging the fewer years you have. You should consider several factors to maximize your savings and make some investments to save $1 million in 10 years. You can also work with a financial advisor who can manage your assets for the future.

Factors That Contribute to Saving $1 Million

To save $1 million you need to make sure you earn enough to cover your living expenses while saving that amount of money. There are several ways to go about saving that amount of money for the future, but here are some of the most important:

• Your Income: The higher your regular income, the more money you are likely to save. Finding ways to increase income whether it’s by getting a new job, starting a business or working on a side hustle is essential to saving money in a relatively short period of time.

• Percentage of Your Income You’ll Save: Saving for the long term usually carries a recommendation of 10-15% of your income, but if you’re trying to go from $0 to $1 million in 10 years then you’ll probably need to increase the percentage. The exception is if you have a large amount of income coming in every year.

• Your Investments: The investments you choose will likely be the key to accumulating more wealth. You can put money into real estate and build value over many years or you can look to invest in historically riskier investments, such as the stock market and aim to accumulate wealth faster.

• Your Annual Cost: How much you spend has a big impact on how much you save because the more you spend, the less money you have to invest or save for the future.

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How Much Money You Should Save Every Month

To reach your goal of $1 million in 10 years, SmartAsset’s savings calculator estimates that you need to save $7,900 per month. This is if you put your money in a high-yield savings account with an average annual percentage yield (APY) of 1.10%. If that amount is not feasible at your income level then you need to make more risky investments to hit your goal.

Here are some examples of how much you should save each month based on what your rate of return is.

• 3% return: Savings ~ $7,200 per month

• 5% return: Save ~$6,500 per month

• 7% return: Save ~$5,900 per month

• 10% return: Save ~$5,000 per month

These numbers are just estimates based on a potential annual return on your investments. Remember that the market can fluctuate quite a bit and can affect how much you need to save so it’s important to grow your savings each month if you want to reach $1 million as quickly as possible.

5 Steps to How to Save $1 Million in 10 Years

To save $1 million in 10 years you need to consider all of the above factors and then create the right savings strategy that will help you get there. There are five steps that anyone can follow that will help get them on the right path to that end goal, but the right method of saving to hit $1 million will depend on your own personal financial situation.

Step 1: Determine Your Appetite for Risk

Before starting on this path to saving $1 million, it’s important to understand how you’re going to get there. Your risk appetite can guide you because it provides how much of your money you are willing to risk to maximize potential returns at any given time. The amount of risk you are willing to take can vary greatly based on your age or how much money you have saved. However, the more risk you are willing to take, the more potential returns you can make if the market has a successful run.

Step 2: Create and Follow Your Investment Strategy

Once you know how much risk you are willing to take, you can create an investment strategy accordingly. The investment strategy is your goal to reach $1 million in a shorter period of time than most retirement savings. You can invest in real estate if you are looking for a slow and stable return while you want to invest heavily in the stock market if you are willing to take more risk. Whatever you choose, the best investment strategies usually have some level of balance in your portfolio.

Step 3: Make Regular Investment Contributions

If you can save $1 million that you can save for 10 years then you probably need to set aside the money for investments on a regular basis. This will give you the money you need to buy properties so they can grow over time. The more money you invest, with the right strategy, the more you will save after a decade. A regular commitment is an important ingredient in building your wealth.

Step 4: Find Ways to Earn More Income

A great way to save more money is to make more money. You can change jobs or take on another job, bringing in more income will make your goal easier to achieve. Many people consider a side hustle or additional project work to help fund their ambitious savings goals. Whatever you choose, seeing how you can save more money for savings or investment can be a big help.

Step 5: Save Money Where You Are

If you maximize how much you can earn and invest, then the next thing you can control is how much you spend. Cutting your expenses wherever you can save money that you can put away or invest to grow your overall wealth. If you invest the amount of money you save then the return on investment in cutting expenses is greater than the amount of money you don’t spend. It takes discipline and real effort to keep your costs as low as possible.

Where To Put Your Money Once You Reach $1,000,000

While the stock market is a great place to grow your wealth, it may not be the best place to keep your $1 million once you build that. The best practice is to usually have money in multiple accounts to diversify any potential risk. Here are some options available to help you save your money when you reach the $1 million mark:

• High-yield savings accounts: A high yield savings account is a safe place to put your money because it sits at a large financial institution and you can get up to $250,000 protected by the FDIC. You will usually earn around 1% – 3% per year on your money, depending on the bank and account you choose. At the time of writing, however, it is possible to find a high yield savings account that pays an annual percentage yield of 4.03%.

• Certificates of Deposit (CDs): A CD is a low-risk investment option with low potential payouts that provides a safe place to keep your money. You will not have access to the funds for the duration of the term of the CD without payment. However, they usually receive protection for the same amount in a savings account.

• Money market accounts: A money market account is similar to a savings account but if you need to access money more often then it can be a good option because it has some similar features to a checking account. .

• Treasury bonds: Treasury bonds can be held for up to 30 years and are backed by the government. The return is usually low compared to other types of investment, but it is generally safe.

Bottom Line

Saving $1 million can seem like a daunting task that requires a lot of navigation. The journey may create setbacks and you will need to use extreme discipline to hit that goal within 10 years. However, with the right strategy and execution hitting $1 million in savings is something that can change your long-term financial outcome. If you’re not sure you can get there on your own then you can work with a professional to help create a plan or manage your assets for you.

Investment Tips

• Trying to analyze the market and figure out where the best place to invest your money can be difficult, but working with a financial advisor can make it easier. A financial advisor can help you create a long-term investment plan and even manage your assets for you. If you don’t have a financial advisor, finding one doesn’t have to be difficult. Free SmartAsset tool matches you with up to three vetted financial advisors serving your area, and you can interview your advisor matches for free to decide which one is right for you. If you are ready to find an advisor who can help you achieve your financial goalsstart now.

• As you look at different investment options, it’s important to understand how each investment affects your overall portfolio. You can use SmartAsset’s asset allocation calculator to see what a suggested portfolio breakdown would be to help you reach your $1 million goal.

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