Most people want to make a million dollars, however, most people do not know how long does it take, what does it require, and how much is required initially to make a million dollars.

Assuming that a person starts of with $100,000. How long does he need to hit a million? What kinds of returns annually does he need to achieve?

Given that most well performing equity funds achieve 10-15%, if you are an individual investor in the stock market, you should be aiming higher. 20%? 30% Or even 40%? Assuming 20% returns annually, it would mean it will take you 13 years, with a $100,000 initial capital, in order to hit a million dollars. Thats actually not too bad, considering you can save $100,00 by the age 30, you should be able to have a million dollars in assets by the time you are 43 years old.

The exact calculation for this is below

One of the main things you have to note though.. For this scenario to work, it uses the power of compounding. What this means is that the returns of the previous year is used to make even more returns the following year. So you cannot make any withdrawals and you have to make that same returns % for the years that follow. Of course, if you make regular deposits, the returns would be much faster. Much much faster. The key is, you don't need high returns every year to become a millionaire. You just need consistent returns every year.

Happy investing!

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