Half a million dollars in 10 years
I was wondering what it would take to go from $0 to $1 million in 5 years today. As exciting as writing the recurrence relation and a short program to solve it, the answer wasn’t all that useful. So I decided to plug in some more realistic numbers for the general population, a half million dollars in 10 years. The following graph and table are the results.
The range of percentage returns is 4% to 20% and the top mutual fund return over the last 5 years, just as a point of reference, which happened to be almost 47%. The monthly contribution was rounded up to the nearest $50 and interest rates all 1% increments. Since the math isn’t exact, there is a total bar representing the half million dollars accompanied with a bar representing the out of pocket contribution.
This is just one scenario that I ran, but I definitely many more. Some were far fetched, such as the million dollars in five years, and some were extrapolations of my actual investments. What I learned is that I need to be very conscious of where I am investing, and am investing any excess cash as soon as possible. The difference between a good return and a mediocre return can mean the difference between wealthy and lower middle class.
| Monthly Contribution | Total Contribution | Yearly Rate of Return |
| $200.00 | $24,000.00 | 47.00% |
| $1,350.00 | $162,000.00 | 20.00% |
| $1,450.00 | $174,000.00 | 19.00% |
| $1,550.00 | $186,000.00 | 18.00% |
| $1,650.00 | $198,000.00 | 17.00% |
| $1,750.00 | $210,000.00 | 16.00% |
| $1,850.00 | $222,000.00 | 15.00% |
| $1,950.00 | $234,000.00 | 14.00% |
| $2,050.00 | $246,000.00 | 13.00% |
| $2,200.00 | $264,000.00 | 12.00% |
| $2,350.00 | $282,000.00 | 11.00% |
| $2,450.00 | $294,000.00 | 10.00% |
| $2,600.00 | $312,000.00 | 9.00% |
| $2,750.00 | $330,000.00 | 8.00% |
| $2,900.00 | $348,000.00 | 7.00% |
| $3,100.00 | $372,000.00 | 6.00% |
| $3,250.00 | $390,000.00 | 5.00% |
| $3,400.00 | $408,000.00 | 4.00% |