56 years old with $1,000,000

I have posted about the allocation of my funds for when I start working and for now, I  have set a limit of $448 per month to investing. Since I would most likely be saving it before putting them in to the stock markets at the right time, I have used an annual percentage yield of about 8%.

Below I have used the number application on a Mac and inputted numbers of my saving rate, current savings I have right now and to have an annual percentage yield of 8%. A saving goal of 1 million is inputted to see how long I would take to achieve that.

The diagram above of course do not put into account of increasing input or reduction of cash input. It will approximately take me 34 years to get to $100 0000 with a monthly contribution of $448 at an annual percentage yield of 8%. So I am 22 this year, adding another 34 years would make me 56 years old.To me, that's amazing.

Coming from an average income family and a single parent family money has always been an issue. For example, my brother has been accepted into a prestigious university in London however my mum does not have the capabilities to send him there and can only rely on a scholarship which he hasn't yet gotten. Another simpler example would be that she most likely would need to work a few more years even after retirement age. Being able to envision the 1 million and have it as an attainable goal really spurs me on because I want to be able to contribute to my family and improve the standard of life for my mum like letting her travel and have good food.

With increasing contributions over the years for example the first year I contribute $448 followed by $558 the next year. This should help reduce the number of years needed. To be honest, I do have a fear of investing a huge portion of money into the stock market. For example, I hope to achieve a passive income of $40 000 per year hence I would need approximately $500 000 invested at a yield of 8%.

Having half a million invested in the stock market is scary for me, right now I have a small sum of money invested and I am young hence I am not that paranoid about the money invested. I believe many people have been advocating diversification of funds to reduce the risk which will reduce the paranoia that I think I will feel. So my next post will be on how to reduce investment stress! Do look out for it 😉 Goodbye 2017! It's been a good run.