Save. Spend. Splurge.

How to become a millionaire at retirement starting with nothing $0 at ages 20, 30, 40 and 50 (Added: 25, 35, 45)

Age-old question right? Well here you go, this is what you need to invest in the S&P 500 index (either in a mutual fund or an ETF), and let it sit and marinate over the years:





The earlier you start, the better it is….

Just take a look….

Age Start with Monthly contribution Total Contributions Total Growth Total at 65
20 $0 $190.00 $102,600.00 $899,563.00 $1,002,163.00
30 $0 $450.00 $189,000.00 $843,256.00 $1,032,256.00
40 $0 $1,050.00 $318,000.00 $690,087.00 $1,008,087.00
50 $0 $2,900.00 $522,000.00 $481,510.00 $1,003,510.00

At the age of 20, you only need to put in $190 a month.

If you leave it off until the age of 40, you need to make up for all of those lost years of investing by increasing your contributions by 552% to accelerate the growth.


Don’t leave this off until tomorrow, because a year later you will look back with regret and wish you started today.

8% is a conservative but realistic return

If we go back the past 40 years to 1980, and look towards 2020, these are the average returns below:

8% return is conservative because you’re obviously going to reinvest the dividends from the S&P 500 companies right back into buying more index mutual funds, and you also have to adjust for inflation as it eats away at your profits too.

If you just stick that same amount of money into a savings account earning 1.5% interest, you’ll end up with almost $500K – $850K in lost wealth:

Age Monthly Contribution Total Contributions Invested at 8% Saved at 1.5% Interest Lost wealth difference
20 $190.00 $102,600.00 $1,002,163.00 146,590.21 $855,572.79
30 $450.00 $189,000.00 $1,032,256.00 248,676.16 $783,579.84
40 $1,050.00 $318,000.00 $1,008,087.00 382,383.99 $625,703.01
50 $2,900.00 $522,000.00 $1,003,510.00 585,711.73 $417,798.27

Is that enough to convince you?

So what should you buy?

Anything that says S&P 500 or “index funds” to start.

Then after you’re comfortable with that, read more, move on to other index mutual funds or index exchange-traded funds, and so on.



  • Financially Fit Dude

    It took me some time to find a way to invest in the S&P500 from Europe, but I eventually find it. There’s an ETF with ticker SXR8, which mimics the S&P500 and I think that would be the one to go with. As I’m close to turning 30, it’s about time.

    Thanks to your summary here I realize that if I want to reach 1 million, I have to take extra steps in investing in order to reach that goal quicker. We’re discussing with my partner buying a rental property, so that might help, but let’s see.

    • Sherry of Save. Spend. Splurge.

      You’ll make it I am sure of it. Your mindset is already in the right place, and you’re only turning 30!!!

      • Financially Fit Dude

        Thank you! I’m hopeful that I’ll manage to reach this goal!

      • Kanoe

        Hi I don’t know anything about investing, so my fist question is where do I go to buy dividend stocks and S&p 500?

        2. Are dividend stocks and S&P 500 the same thing? Should I buy both if not?

        3. I’m asking because I want to build a house first, in cash. What happens if I cash out?

        4. I’m 42, need to get going. Please and thank you for the help. I’m in the U.S.

        • Sherry of Save. Spend. Splurge.

          1. Dividend stocks means individual companies that pay out dividends. Read: Investing 101

          How to invest to get dividends is also another post

          2. No, dividend stocks are individual stocks. S&P 500 is an index of 500 stocks. Read the two posts above.

          3. If you cash out and you have it invested in your 401K you will pay tax penalties. If it is in an Roth IRA, I don’t think you get taxed. It depends on where you have the cash invested.

  • DC

    Love these charts and thank you for posting this summary. It definitely is a great ready recknor table to know where one should start to reach a certain goal depending on the current age.

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