If you start saving and investing early on, becoming a millionaire might not be as hard as you think.
If you're putting away $415 a month starting in your 20s, $651 a month starting in your 30s or $1,300 starting in your 40s, and getting a 6 percent return on your investment, you're on the right track to hit that milestone by 67.
But what if you want to speed up the process and reach seven-figure status in the next 20 years? We used CNN Money's helpful millionaire calculator to estimate how much you'll need to put away each month.
If you're starting from scratch with zero savings, you need to save $2,200 a month to become a millionaire by February 2038.
Now, let's say you already have some money put away. If you already have $10,000 saved up, you'll need to put away $2,100 per month to become a millionaire by April 2038.
And if you already have $50,000 in savings, you need to contribute $1,800 per month to become a millionaire by May 2038.
Try out the calculator yourself here.
These differences speak to the power of compound interest, in which any interest earned accrues interest on itself and a little money invested now can end up being more than a lot of money invested later. In short: If you want to become a millionaire, the earlier you start investing, the better.
This calculation doesn't account for the many variables that can affect your wealth over several decades, including windfalls, emergencies and rises or dips in the market. But it can give you a good idea as to whether or not you're saving enough to retire comfortably.
Of course, saving hundreds or thousands a month is an ambitious goal. Even $2,100 a year is more than most Americans can manage. But getting into the habit of saving any amount will be great for you in the long run.
Here are a few simple, low-stress ways to start investing:
- Sign up for your employer's 401(k) plan and take full advantage of any company match, which essentially gives you free money
- Contribute to a Roth IRA or traditional IRA, which are both individual retirement accounts that offer tax breaks
- Use micro-investing apps such as Acorns, which help you begin by investing small amounts of what it calls your "spare change." The app rounds up your purchases to the nearest dollar and automatically puts your coins to work
- Try other apps that aim to make investing simple
- Consider automated investing services known as robo-advisors that can help you out no matter how much you have in the bank
- Research low-cost index funds, which Warren Buffett recommends
Don't miss:
- 65% of Americans save little or nothing—and half could end up struggling in retirement
- A 36-year-old who learned to invest like Charlie Munger explains his 4 principles
- Here's exactly what an index fund is—and why it's Warren Buffett's favorite way to invest
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