Here’s How Much You Needed to Invest Since 2000 to Have Become a Millionaire By Now

2 min read

Here’s an interesting thought experiment: How much would you have needed to invest since 2000 to have become a millionaire by the start of 2018?

Let’s assume you invested all of your savings in an S&P 500 index fund. Here are the S&P 500 annual returns since 2000:

Assuming you invest a lump sum amount at the start of each year, it turns out that you would have needed to invest $22,325 each year in the S&P 500 to accumulate $1 million by the start of 2018:

What if you instead started investing at the start of 2001?

It turns out you would have needed to invest $23,674 in the S&P 500 at the start of each year in order to accumulate $1 million by the start of 2018:

We can extend this thought exercise to all starting years from 2000 to 2010:

Unsurprisingly, the later you started, the more you needed to contribute each year to achieve millionaire status by the start of 2018.

This chart represents these numbers in a slightly different way:

Here is how much of your final $1 million would have been come from contributions vs. investment returns, based on your starting year:

For someone who started investing in 2000, 40% of their final $1 million would have come from contributions. Contrast that with someone who started investing in 2010, who would have had 52% of their final $1 million come from contributions. 

Assumptions used in this analysis:

-All contributions were made into an S&P 500 index fund
-Contributions were made in a lump sum manner at the start of each year
-S&P 500 Annual returns come from this data source

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Zach

Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.

He quit his day job as a data scientist in 2019 because he was able to earn enough income from profitable websites to replace his salary. He now teaches people how to start and grow their own profitable websites from scratch in the Income Community.

Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.

His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free, has no trading or maintenance fees, and even allows him to set up automated target-allocated investments.

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