I am 55 years old and I know I am starting late but I’d like to be a millionaire in five years’ time, when I turn 60. I have only N130,000 in investment. What do I need to do more in order to hit my target in five years ’time?
Based on your existing savings and investment of N130,000, it appears that you will need to save and invest a further N122,633 annually (or about N10,219 monthly) in order to become a millionaire by age 60 .
However, note that a million naira today will not be worth the same in five years. One million naira adjusted for inflation of 10% will be N1,464,100 in five years. You will need to save and invest N193,778 annually (or about N16,148 monthly) to reach that goal by age 60. Please see the table below for this calculation.
Age Beginning Balance Savings @ 0.0% Earnings Taxes @ 10.0% Ending Balance
55 N130,000 N122,633 N25,263 N2,526 N275,370
56 275,370 122,633 39,800 3,980 433,824
57 433,824 122,633 55,646 5,565 606,539
58 606,539 122,633 72,917 7,292 794,798
59 794,798 122,633 91,743 9,174 1,000,000
Courtesy: Yahoo! Personal Finance