How Long Does It Take To Become A Millionaire?

A million dollars. For many people, it’s the pinnacle of financial success. Fostacks of $100 bills forming stepsr others, it’s just the first stepping stone toward their outrageous dreams. But how long does it take to actually reach that goal? How much would you need to save on a monthly basis to net a cool million? And, most importantly, is achieving millionaire status even within the realm of possibility for most Americans?

If you’ve ever seriously considered these questions with the intention of implementing the answers in your own life, or you’re simply curious, we’ve got the inside scoop. We’ve crunched the numbers and worked out the math to help you find out exactly how long it takes to become a millionaire.

Who wants to be a millionaire?

Believe it or not, a million dollars is approximately four times the median net worth of retirement-aged people in the U.S. Even more incredible, a net worth of a million dollars is well within the reach of most Americans. You don’t need a six-digit salary to make it to the millionaires’ list; all you need is enough time and a sound investment strategy.

How long does it take?

There is no pat answer to this literal million-dollar question. The amount of time it will take you to become a millionaire depends on the following factors:

  1. The amount of money you invest
  2. The rate of return on your investment

The table provided here gives you an idea of how much you’d need to save, and how many years it would take you to reach $1 million, at various rates of return.

Monthly Savings Years to $1 million with 10% annual returns Years to $1 million with 8% annual returns Years to $1 million with 6% annual returns Years to $1 million with 4% annual returns
$100 44.5 52.9 65.7 88.6
$500 28.8 33.4 40.1 51
$1,000 22.4 25.5 29.9 36.7
$1,583 18.4 20.7 23.8 28.4
$2,083 16.2 18 20.4 23.9
$3,166 13 14.2 15.8 18
$4,166 11 12 13.2 16.8

The amounts used after the $1,000 mark in this table represent the numbers that single and married employees can contribute to their IRAs and 401(k) plans, with $4,166 representing the collective maximum monthly contributions for a married couple. Note: Maximum contributions, as of 2019, are set at $19,000 a year for 401(k)s and $6,000 a year for traditional IRAs.

If you already have a tidy sum saved up, and/or you’d like to see how long it would take you to reach a million by socking away a monthly amount that is different than any amounts shown on this table, you can input your own formula into this calculator to get the answers you need.

Getting started

Now that you’ve determined how long it will take you to reach your first million, don’t waste any time getting started. If you’ve made this your goal, the sooner you begin investing, the less money you’ll have to put away each month, and the sooner you’ll reach $1 million.

The easiest and most basic starting point for your million-dollar prize is to maximize your contributions to your employer’s 401(k) and your own IRAs and HSAs. Next, look into investing with a low-cost index fund, mutual fund or lifecycle fund.

If you can’t spare the money you’d need for investing enough funds to achieve your goal, take some time to review your budget and to plug up any expensive holes. Look for pricey habits you’d be better off giving up, subscriptions you can do without and entertainment costs you can trim without feeling the pinch. It might not be easy to make all those changes, but with a million-dollar finish line in sight, you should have all the motivation you need to start living a financially responsible life today.

Two neglected factors

One crucial factor most people forget about when trying to invest their way toward a million dollars is the rule of inflation. Simply put, a million dollars today does not have the same value as a million dollars 30 years from now. When you adjust for inflation at 3 percent a year, $1 million in 2020 would need to grow to $2,427,262 to have the same purchasing power in 2050. For this reason, you may want to tweak the amount you invest as a way of accounting for inflation. This way, you can be sure you have a true $1 million at the end of your investment timeline.

Another point that is often overlooked is the fact that no one can accurately predict the future. There’s no way to know what life events you’ll experience over the next three decades. Some of those can significantly affect your finances in either direction, such as windfalls, expensive medical emergencies, market crashes and the like. It may end up taking you a lot less time than you’d anticipated to reach $1 million, or you may never get there at all.

Are you ready to start investing your way toward one million dollars? Speak to a representative at [credit_union] today to discuss our investment and savings products, as well as get some beginner investment advice. You can be a millionaire!

Your Turn: Do you dream of being a millionaire or did that goal never make it on to your bucket list? Share your thoughts with us in the comments.

SOURCES:
https://www.fool.com/amp/retirement/2019/07/14/how-long-does-it-take-to-become-a-millionaire.aspx

https://www.moneyhelpcenter.com/how-close-are-you-to-being-a-millionaire/
https://www.daveramsey.com/blog/how-to-become-a-millionaire
https://www.financialsamurai.com/how-long-does-it-take-to-become-a-millionaire/
https://www.cnbc.com/amp/2017/05/19/how-long-it-will-take-you-to-become-a-millionaire.html

Should I Go Solar?

Q: My summertime electric bills are sky-high. For this reason, I’m really thinking aboutsolar panel installation on roof having solar panels installed on my roof. I figure it’s gotta help me save on energy costs, but I hear they can be super-expensive. Should I go solar?

A: Solar panels are popping up on roofs all across the country. This year, with a 30-percent federal tax credit on solar panels extended until the end of 2019, solar panel installation is especially popular. It’s also incredibly effective: A solar panel system can lower a three-digit energy bill to less than $10.

But, are they worth the price? Let’s take a closer look at the cost-effectiveness of solar panels and highlight some important questions that will help you determine whether a solar energy system is the right choice for your home.

The dollars and cents of going solar

Most residential homes will need a five-kilowatt solar panel system for meeting their energy needs. According to the Center for Sustainable Energy, this will cost homeowners between $15,000 to $25,000, or $10,500 to $17,500 after the federal tax credit.

That’s a whole lot of money! Let’s take a look at four ways you can pay for your solar panel system:

  1. Cash. If you can afford it, paying for your panels upfront will bring you the biggest return on your investment since, after the initial startup fees, your panels likely won’t cost you a penny. Depending on your system and your general energy consumption, your solar panels can reduce your electric bill by 70 to 100 percent. This means most systems will pay for themselves in five to seven years.
  2. Lease agreement. Solar leasing is available in about half of the country. Like a car lease agreement, you’ll pay a monthly rent instead of an upfront fee for your panels. The leasing company will then install your panels and collect the federal tax credit, as well as any government incentives available in your state, on your behalf.

    Leasing solar panels is generally not recommended for several reasons. For one, after the lease agreement is over, the company will either remove the panels or charge you full price for the privilege if you want to keep them. You also may end up saving less on your energy costs than you assumed since many leases contain an escalator clause, which increases lease payments by 3 percent a year. Finally, a leased solar panel system can scare off potential homebuyers should you decide to sell your house before the lease is up.

  3. Solar loan. If you’d rather not lease your panels but you don’t have the cash available to pay for them upfront, you can take out a loan created just for the purpose of funding this purchase. A secured solar loan will use your home as collateral and offer tax-deductible interest, while an unsecured solar loan will likely have higher interest rates. Prepare to pay high origination fees with any kind of solar loan as well.
  4. Home Equity Loan or Home Equity Line of Credit (HELOC). Excluding cash, the most financially responsible way to finance your solar panel purchase is through a loan or a line of credit taken out against your home’s value. Speak to a Loan Officer at Destinations Credit Union to learn about the low startup costs and interest rates on our home equity lines of credit. Interest is often tax-deductible (talk with your tax professional), and the funds you need can be available to you in very little time.

Are solar panels for you?

Ask yourself these questions before you make a decision:

  1. Which way does my roof slant? In the United States, south-facing roofs are the best recipients for solar energy. Next up is west-facing, and then east-facing roofs. North-facing roofs are the least desirable for solar.
  2. How much sunlight does my roof get each day? Are there obstructions, like neighboring homes, trees or hills that block the sun from reaching your roof? It’s best for sunlight to hit your panels for a minimum of five hours a day.
  3. How large is my roof? An average residential solar system will need 20 panels to receive sufficient sunlight, which comes to roughly 500 square feet of roof space.
  4. What type of roofing do I have? The cheapest and easiest solar panel installations work on roofs made of asphalt shingles or corrugated metal.
  5. How old is my roof? It only makes sense to install your panels on a roof that has many more years of life left. Otherwise, you’ll need to pay to have the panels removed and then reinstalled when you replace your roof. Similarly, it’s not worth installing panels if you plan on moving out of your home within the next decade or so.
  6. How expensive is my electricity? The higher your local electricity rates, the more cost-effective your solar panels will be. You can determine the rate you pay per kilowatt hour by looking at your most recent energy bill.
  7. Are there any government incentives in my state? Aside from the  federal tax credit mentioned above, many states offer their own incentives for going solar. You can check for any available state credits on the  database of state incentives for renewables and efficiency.

The bottom line

Should you go solar? At the end of the day, it’s your call. If you can afford to pay for the panels or take out a HELOC to help fund the purchase, and all other factors are in your favor, you may want to consider getting solar panels. Especially consider it while the federal tax credit is still active.

However, if you don’t think you can afford another monthly payment and you don’t believe solar panels would be in your best interest, you can find other ways to cut back on your energy costs without going solar.

Your Turn: Is your home solar-powered? Tell us what drove this decision and how your solar panels are working out for you in the comments.

SOURCES:
https://www.washingtonpost.com/lifestyle/home/considering-getting-solar-panels-here-are-the-right-questions-to-ask/2018/03/09/3190c71a-20c0-11e8-94da-ebf9d112159c_story.html%3FoutputType%3Damp

https://www.nerdwallet.com/blog/finance/save-money-putting-solar-panels-roof/
https://www.tdworld.com/commentaries/5-reasons-why-i-don-t-have-solar-panels-my-roofyet
https://www.consumerreports.org/energy-saving/real-cost-of-leasing-vs-buying-solar-panels

Do My Child’s Activities Really Need To Make Me Go Broke?

It’s back-to-school season and you’re just about ready to zip that backpack closed before children with uniforms posing for cameratossing that supply list into the trash. You’ve been shopping for weeks to get the right pencils and pens, binders and the dozens of other must-haves. This, of course, is in addition to the perfect school shoes and autumn wardrobe. But now you’re done, done, done! Your sanity and your budget are ready for a breather – at least until the holiday shopping season starts.

But then your darling daughter comes home breathless from school telling you she’s made it onto the school’s soccer team. She’s thrilled and can’t wait to start attending practices and games! Oh, and did she mention she’ll need some money for her uniform and equipment?

Before you can finish digesting this piece of news, your son barrels through the door and announces he’s decided to take drum lessons. It’ll only be, say, $600 for the drum set, plus the price of lessons. But that’s not a big deal for you, is it?

Extracurricular activities are an important part of a child’s development. They allow students to shine in ways that may not be possible for them in the classroom. Plus, it helps kids step out of their social circles to forge new and lasting friendships. They serve as a creative outlet and can improve your child’s physical and cognitive health. If you have a real prodigy in your family, they may even be your child’s gateway to a college scholarship, and possibly a lucrative career.

But there’s no getting around the truth: Extracurricular activities are expensive. If you’ve got several school-aged children at home and each one wants to participate in two activities, you can be looking at an investment as high as $10,000 or more because of fees, equipment, uniforms, instruments and supplies.

No worries, though; you don’t have to choose between your budget and your children’s happiness. Here are some ways you can save on your kids’ extracurricular activities this year:

  1. Limit the number of after-school activities you allow for each child

If you’ve got several over-ambitious young ones at home, consider limiting extracurricular activities to just one per child. You’ll actually be doing your children a favor by forcing them to pick one activity of focus where they’ll be channeling all their energy in one direction.

They’ll also be more dedicated to perfecting their game or hobby when they own their choice. Plus, it’ll be easier for them to keep track of just one practice and performance schedule – and a lot easier on your carpool calendar, too! Finally, you’ll help your children avoid taking on too much so they are less likely to wind up neglecting their schoolwork or not having any time to spare for family and friends.

  1. Register early

Lots of children’s sports programs offer discounts of up to 30 percent just for signing up early. Speak to your children about after-school programs and sports teams months before the official season launch so you can register early and snag those early-bird specials. You might also be able to net a discount by pre-paying for the entire season instead of paying on a monthly basis.

  1. Purchase used equipment

Save big on sports gear by purchasing gently used equipment from sites like PlayItAgainSports and SidelineSwap. Some of these sites also allow you to sell your own used equipment.

  1. Swap equipment

If you have friends with kids who are (or were) also into sports and music, see if you can swap equipment and instruments from year to year. Maybe your friend’s son was into guitar last year and baseball this year, while your daughter’s interests ran in the opposite direction. Swapping with friends allows you to save on expensive equipment while putting your own unused gear to good use.

  1. Rent musical instruments

If you’ve got budding musicians at home, consider renting the instrument they’ve taken up this year. There’s no way to tell if that burst of passion they’re currently nursing for the oboe is just a passing phase or the beginning of a hobby that will last a lifetime. Why blow hundreds of dollars on an instrument only to see it lying forgotten in the attic in a few months time? Some instruments, like the French horn, can cost as much as $1,000 but can be rented for as little as $50 a month.

If your child is convinced they’ve found their instrument of choice or you’ve already been renting one for a while, you can purchase gently used musical instruments from resale sites like Craigslist and eBay or through Reverb, a site devoted to selling used musical instruments.

  1. Volunteer your time

If you’ve got the time to coach or manage a team, or even just to walk around selling refreshments during games, you might be able to nab a discount on the program’s fees and equipment.

Don’t let a tight budget stand in the way of your child’s creative and physical development. By making smart, frugal choices, you can turn your children’s dreams into reality without draining your wallet.

Your Turn: How do you save on your children’s extracurricular activities? Share your own tips and tricks with us in the comments.

SOURCES:
https://www.goodhousekeeping.com/life/parenting/g27678115/back-to-school-hacks/

https://www.moneycrashers.com/save-extracurricular-activities-kids-after-school/
https://www.parents.com/parenting/money/saving/11-ways-to-save-on-after-school-activities/

The Ultimate Smart Shoppers Cheat Sheet

You’ve already perfected your monthly shopping schedule to get the best possible pricescouple looking at new appliances throughout the year: linens in January; luggage in March; household appliances in May; patio furniture in September and wedding dresses in December.

But, did you know you should be timing your shopping throughout the week as well? That’s because each weekday brings its own deals and specials. There are some items you can get the cheapest on Wednesdays, others that are best bought on Fridays and still others that will see their biggest markdowns on Sundays.

Here’s the ultimate cheat sheet for your weekly shopping.

Sunday: Large household appliances

Does your refrigerator need replacing? Looking to swap out your oven for a newer model? Home improvement stores, like Lowe’s and Home Depot, tend to mark down their large appliances on Sundays.

Monday: Deals on wheels and electronics

If you’re in the market for a new car, hit the dealer’s lot on Monday. Car dealerships are busiest over the weekend, and the comparative quiet of a Monday will put you in a favorable position to negotiate a great price on a new car. Don’t forget to get preapproved for your loan and use Destinations Credit Union’s car buying service to get great rates and terms!

You’ll also want to check out the large chain stores for discounted electronics on the first business day of the week. Stores like Best Buy offer exclusive manufacturer rebates on Mondays, which can significantly lower the price of an expensive product.

Tuesdays: Houses, airline travel and more

Tuesdays are the recommended weekday for making an offer on a house, particularly the first Tuesday of the month. This is when most sellers will review the activity surrounding their home from the last month and be more open to accepting an offer that’s considerably lower than their original asking price.

If you’re looking to fly in the near future, book your flight on a Tuesday morning. According to data analyses performed by travel-planning company Skyscanner, airlines mark down flight prices by 15-25 percent late each Monday evening. By Tuesday morning, competing airlines will offer matching or lower prices, giving you the best selection of affordable flights.

Tuesdays are also great for purchasing computers online from major retailers, like HP or Dell. Don’t look for discounted MacBooks, though, as Apple rarely marks down its products.

For a terrific way to end your Tuesday, go see a movie. Tickets to the latest blockbusters are usually discounted during the mid-week slump.

Wednesdays: Groceries, discounted apparel and fuel

Forget the weekend grocery run; the best time to restock your pantry and fridge is on Wednesday. Most supermarkets roll out their new sale events on this day, rearrange their aisle end-caps and slap discounts onto perishable products that are left over from the beginning of the week, such as meat, poultry and cheese. If you can swing it, shop early to take full advantage of the sales. Feel free to load up on the marked-down perishables, which will still be days away from their sell-by date. Stick them in the freezer if you won’t use them before they go stale. You’ll also get the biggest bang for your buck in the produce aisle on Wednesdays, when most groceries set out a fresh display of fruits and vegetables.

If you’re a fan of discounted quality clothing, you’ll want to hit TJ Maxx and Marshalls on Wednesdays, as this is when these stores post their new markdowns. Old Navy also features new discounts on Wednesdays.

Unless gas prices are on a downward spiral, fill ‘er up on Wednesday! Weekly gas hikes will take effect over the weekend, often as early as Thursday morning.

Thursday: Clothing, shoes and handbags

Get first dibs on weekend clothing sales at the big-name stores by hitting the mall late on Thursday. Shop for matching footwear with in-store coupons, which also debut on Thursday. Then, complete your new look with a new handbag, which see steep online discounts each Thursday.

Friday: Accessories

Pick up your costume jewelry, belts and scarves on Fridays to score the best prices. According to Lifehacker, online accessories see an average discount of 42 percent on the last workday of the week.

Saturday: Books and yard sale treasures

Amazon offers discounts on books and e-books on most Saturdays, so you’ll want to check out the e-tailer giant at the beginning of the weekend for the best selection at the best prices.

Saturdays are also prime time to pick up treasures at neighborhood yard sales and thrift stores. You’ll get the best picks in the early morning hours, but you’ll score the hottest deals later on in the day when the owners are itching to get rid of all their wares and close up shop.

Your Turn: Is there a weekday shopping hack that has worked for you? Tell us your secret shopping strategy in the comments.

SOURCES:
https://www.thekrazycouponlady.com/tips/money/back-to-school-shopping-hacks.amp.html

https://www.aol.com/article/lifestyle/2018/07/29/the-best-day-of-the-week-to-go-grocery-shopping/23491169/
https://www.dcrstrategies.com/shopping-guide-best-days-of-the-week-to-buy/
https://www.thekrazycouponlady.com/tips/store-hacks/retailer-clearance-markdown-cheatsheet.amp.html
https://www.rather-be-shopping.com/blog/2014/06/09/insider-tips-on-store-markdowns/

Gift Giving on a Budget

This article is courtesy of Faye Griffiths-Smith of UConn Extension, a nonprofit coordinator of 

wooden boards with holiday decorations and the word Save

Connecticut Saves.

As the holiday season approaches, do you find yourself looking forward to the festivities, but concerned about the impact on your wallet? You are not alone. By doing some planning now, you can simplify your gift giving. Here are ten ways you can enjoy this special time of year and keep spending in check:

  1. Food. Consumable items are very popular during the holidays. The recipients may enjoy the product themselves or share it with others when entertaining. Consider special breads, beverages, fruit baskets, snack items, regional favorites, and gourmet coffees and teas.
  2. Go green. Find locally grown plants, flowers, and dried wreaths. Another option might be to purchase colorful washable napkins, placemats, dishcloths, reusable bags, and lunch bags with individual containers for sandwiches and snacks.
  3. Set limits. This could be done by establishing a dollar amount per gift, completing your shopping in only one or two trips, purchasing one gift per family, or committing to doing all your shopping locally.
  4. Made by you. Make your own food specialty. Knit a scarf. Hand craft an item. Create an annual holiday ornament. Give a framed photo.
  5. Hobby-related gift or gift certificates. Consider the recipient’s hobbies and interests. Are there gardeners, chefs, woodworkers, knitters, readers and gamers on your list? Gift accordingly by providing them with the tools or materials to do what they enjoy.
  6. Agree on a gift challenge. Discuss this idea well in advance of the holidays with those whom you regularly exchange gifts, but make it fun. You might suggest handmade items only, gifts under $10, one gift for a whole family, limit shopping to consignment or thrift store finds or pick a theme such as useful or consumable items only.
  7. Purchase the same type of gift for everyone. It could be umbrellas, scarfs, journals, board games, puzzles, nice pens, throws, books, or flashlights and batteries.
  8. Recipe Book. You could make up a recipe book with family favorites or provide a blank recipe book for the great cooks in your life.
  9. Coupons for your services. Offer your time and abilities. You can create coupons related to your skills. Perhaps it is cooking a favorite meal, snow shoveling, home repair or an oil change, mending, guitar lessons and so on.
  10. Create a special memory. Look in newspapers or online for special events this holiday that are free or low cost. Instead of purchasing gifts, make a date with your family and friends to enjoy an event together and get together for desserts and coffee.

Most importantly: enjoy your holidays!