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Want to Become A Millionaire? Start Now!

4.04.2017 by GTC Financial Services

If you have been procrastinating when it comes to saving some money for retirement, you’re not alone.  There’s always that new tech gadget to buy, that grand vacation to take.  But you may be paying a higher price for these items than you realize.  You may be giving up your chance to be a millionaire.  Consider this:  If you were to begin saving just $2,000 a year—$167 a month— at age 22 and you earned an average annual rate of 10% on your money over the years, you would be a millionaire before your 65th birthday.  If you wait until you’re 30 years old to begin saving this amount, you will have less than $550,000 in your account at age 65.

You might think that a return of 10% a year is an unrealistic expectation, but history says otherwise.  The average annual return on the All Ordinaries Accumulation Index (XAOA) over the past 20 years (January 1997 through December 2016) was 10.2%.  That takes into account a number of economic booms and busts.  If we use data from the past forty years—1977 through 2016—the average is even higher at 14.7%.[1] Thus, it’s possible that you might earn an average return of more than 10% on your money over the years. However, even if you were to earn a lower rate, it’s still advantageous to start saving sooner rather than later.  

The table below displays the amount that you can accumulate by age 65 if you begin saving $2,000 a year at varying ages and earn 5%, 8%, 10%, 12%, or 14% a year on your money: 

Interest rate











Age today

       Amount Accumulated By Age 65



















Regardless of the average annual interest rate earned, waiting the extra eight years from 22 to 30 years old results in a significantly lower account balance at age 65.  This is because of the compounding effect.  When you invest your money, earn interest on it, and leave the interest in the account, you earn interest on your interest the next year.  And so on it grows.

Start early; finish early.  You may be able to retire at a younger age. Perhaps you envision yourself sailing into the sunset—quite literally, on your new 40-foot sailboat.  More importantly, you will be creating a sound financial life for yourself, which translates to a significantly less stressful life—one that you will be able to enjoy to the fullest, doing the things that you want to do.

To get started make an appointment contact us on 49725177

[1] (Calculations are based on data provided at http://www.marketindex.com.au/sites/default/files/statistics/historical-returns-infographic-2016.pdf.)


This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances.

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