1 Million

How To Retire Young With 1 Million Dollars?

The amount of money you have, has got nothing to do with what you earn. People earning 1 million dollars a year can have no money and people earning $35,000 a year can be quite well off. It’s not what you earn, it’s what you spend.
– Paul Clitheroe –

Everyone dreams of having $1 Million, but fail to make because we don’t know how to make a million.

What if I say that making 1 million is damn easy just by saving a portion from your salary and also taking a vacation every year?

I am also one of those who didn’t understand the ABCD of finance. So let me take you through the journey of making1 million.

I am not writing this article to give you investment hacks or talk about managing your finances with some alien economic terms.

I am gonna share with you a simple, practical, & easy calculation guide to make your first million.

Are you ready?

Important Tip: Before you apply the tips that I share with you first you need to believe that you can do it. Your old belief system that exists in your subconscious mind will say you can’t be a millionaire just by reading an article.

But when your mind will see this easy way, and the practicality of this technique it will accept.

How Long Does It Take To Make 1 Million?


It depends on how much you:

  • Spend
  • Save
  • Invest

I read a budgeting rule on the internet – It’s 50/30/20 budgeting rule where you spend 50% of your income on your basic needs, 30% on your wants, and only 20% on your earnings.

But this rule is not practically applicable.

It will make you 1 million when you won’t be able to spend in the way you want as you will grow much old. By saving only 20% of your income will gain you 1 million but it will double the years.

So, here is what is my budgeting rule and that is 40/20/40. I am damn sure that this will make your dollar 1 million in less than 10 years and I am gonna practically prove that to you.


According to this budgeting rule, you spend 40% of your income on necessities, 20% on your wants, and 40% towards savings.

As of now, you can only spend 20% of your income on your wants because we have to trade-off certain things in life to achieve something big.

To make it simpler, just download this Investment Tracker Excel Template with predefined formulas.

Download this and open on your desktop and let’s understand this simple calculation together.

Follow these simple steps to understand calculation my way.

Choose any bank with good interest rates and open recurring account or invest in any mutual funds performing well. Every month, invest 40% of your income in that account/fund.

The first sheet is for bifurcation of your income and defining your target. Insert your current salary, current age, and retirement age along with your target amount.

It calculates the number of years between current age to retirement age. Bifurcate your income according to 40/20/40.

For instance, your monthly income is $10,000, according to the budgeting rule, the saving amount will be $4000.

First Year

Insert monthly income for all 12 months. The sheet calculates the 40% savings of your income by itself and accumulates the total savings the whole.

Insert the interest amount that you earned in that year from the bank and it will calculate your return on investment percentage. And it is added to your total saving amount.

We will calculate the first five years of savings in the same manner.

As you can see, at the end of the first year, saving $4000 a month will save $48,000. You receive $3000 as interest/return on your savings.

Second Year

Let’s calculate it for the second year.

Usually, salaries increase every year approximately by 20%. Now your salary is $12,000 and your savings are $4,800 per month.

Insert the new salary amount in the second year slot of investment tracker. Thus, previous year savings + Second Year Savings + Second Year Interest/returns are equal to your total savings.

$51,000 + $57,600 + $6,800 = $1,15,400.

Third Year

For 3rd year, say your salary increases by 25%. So, the salary is $15,000 and your savings will be $6,000 per month. Enter this $15,000 in the income column of the third year.

In the third year, previous years savings + Third Year Savings + Third Year Interest/returns are your new savings amount.

$1,15,400 + $72,000 + $11,700 = $1,99,100.

Fourth Year

Let’s calculate 4th year. This year’s salary increase is 25% that makes your salary $18,700 and $7,480 savings per month.

At the end of the fourth year, previous years savings + Third Year Savings + Third Year Interest/returns are your new savings amount.

$1,99,100 + $89,760 + $18,050 = $3,06,910.

Fifth Year

For the 5th year, your salary increases by 30%. Your salary is $24,310 and monthly saving is $9,724. Insert this in the fifth year slot.

At the end of the fifth year, previous years savings + Fourth Year Savings + Fourth Year Interest/returns are your new savings amount.

$3,06,660 + $1,16,688 + $26,475 = $4,50,073.

Congratulations, you are halfway through.

So, the total net saving amount at the end of 5 years will be around $4,50,073. Now, we only need $5,49,927 to reach $1 million.

When your investment increases you can shift the same in some other investments that can give you good returns. Previously, the return on investment was approximately 6.25%.

Now do the same for remaining years until you reach your target. Insert details in the second investment planner and then your monthly salary for the next 3 years.

Sixth-year Calculations:

$4,50,073 + $1,28,352 + $46,274 = $6,24,699 with 8% interest/return and salary increase of 10%.

Seventh-year Calculations:

$6,24,699 + $1,28,352 + $60,244 = $8,13,295 with 8% annual interest/return with no salary increase.

Eighth-year Calculations:

$8,13,295 + $1,34,400 + $75,816 = $10,23,511 with 8% annual return and only 5 % salary increase.


In 8 years you are literally and practically able to make 1 million dollars.

How To Grow Your Salary Every Year?


I told you how to save, how to put calculations in one simple sheet, and make your first million. But there are still some pieces of the story that needs to join.

If your salary is stable for the next 5 years, you will not able to reach a million soon. So, you need to grow your salary every year.

So, if you are earning $10,000 currently, remember, that your salary has to increase at least 20% every year to reach your goal.

I know it may sound impossible to you but I told you earlier, don’t let this negative thought insert in your mind. You have to be open-minded.

Increasing salary every year for me was a difficult task. So, I chose the easier way. I started looking for side projects as my passive income and increased my yearly income.

In the first year, I could increase the salary by 3% and now it has increased by 10%.

5 Tips For Beginner Investors


For a beginner investor, apply some smart tips for your investment plan to reach your 1 million dollar goal faster.

Have A Defensive Investment Plan

Defensive Investment simply means investing in various types of cash markets like stocks, mutual funds, buying high-quality blue-chip funds, fixed deposits, or earning through bank interest.

Prepare a plan where you are balancing your investment into every type of fund. So, if one market goes down, you have other funds to save your total investment.

Invest Early

The early you invest, the early you become a millionaire. The sooner you start, you will need less money to achieve your 1 million dollar target.

If you are a college student right now, it’s best to start with the investment plan we discussed today.

Pay Peter To Rob Paul

We all have priorities and wants in our life but to balance with our investment strategy, we need to cut on some things to achieve something.

Suppose, you want to go on a Thailand trip for next year. But you want to buy your iMac like this year.  Either you can cancel your trip or let go of your iMac. And adjust your finance accordingly.

Improve Your Self Continuously

Learn new skills and keep up with the current technology. Read as many books and increase your knowledge on various topics like investment, relationships, family, and career.

These things will help you gain wisdom and knowledge. You can become wiser every year by reading 12 books a year.

Your Experience Matters Than Your Age

Many people might tell you that you are still not ready for the challenge in life. Well, they can be right at their place but all it depends on your experiences. The more you experience at an early stage, the more you learn.

If you meet people with their ten years of experience, you increase your experience in a total of 10 years every year than your current age. Learn from others and increase your experience.

You can also check out this article on How To Manage Your Finances As A Young Earner?

Final Thoughts


Now, I think your mind is convinced of the million-dollar dream. It is never about how much you make, it is always about how much you save.

Properly channelizing your money and following these really simple tactics you can easily make a million dollars.

If you still find any difficulties feel free to ask. I will be more than happy to help you.

1 Million

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: