A million rand. R1000000! That’s six zeroes! And a whole lot of financial security for you and generational wealth for your family. How are you going to reach that magic number? Let’s find out!
Save your way to R1000000
A sure way to get to R1000000 is to save your way there! Saving is when you put money in a savings account, usually at a bank, that earns interest. Put away something each month, don’t withdraw any money that you have saved or interest you earn, and you can get to your first million.
The more you save each month, the faster you will reach your goal. Save R500 a month at 8% interest, and you will be a millionaire in 33 years and 4 months! Too long? Why not double that savings amount and put away R1000 a month? In 25 and a half years, you will have saved your first million.
Good to know: When you put money in a savings account the amount you invested is safe, and there is very little chance you can lose it. Saving in a reputable bank is a very safe place for your money!
Invest your way to R1000000
Investing is a little riskier than saving, because you are putting your money in different assets such as shares on the JSE or bonds or property and there is no guarantee they will grow or not lose value. Share prices of companies can go up and down as can the value of property! But, your investment can also earn a higher return than a savings account!
If you invest R500 a month and earn a 10% return, you will have your million in 28 years. Invest R1000 a month and you’re a millionaire in 22!
Good to know: Deciding where to invest can be a challenge. Your financial adviser can assist and recommend suitable investments. They can also advise you on how to maximise your chances of making money and minimise your chances of losing money.
Quick ways to boost your savings or investment
Feeling a little disappointed at how long it takes to reach your million? Boost your savings and investments and you will reach your goal faster!
1. Increase the amount you save or invest each year
For example, if you are saving R500 or R1000 a month and increase your savings by 5% each year, you can reach your million milestone five years faster!
2. Save a little extra when you can
Yes, don’t be limited to an annual increase in your contributions. When you have a little extra in your budget, (or pay off a debt!), save this amount as well!
Good to know: You can earmark certain earnings, such as from a side hustle, for your million savings account!
3. Add lump sums to your account
Got a bonus at work or received a gift from a friend or relative? Add some or all to your savings and investment!
The lottery probably won’t make you rich!
Okay, it is possible to get to your first million faster by winning the lottery. But don’t bank on it! It’s possible but not probable. The odds of winning big on SA’s lottery are anything between 1 in 13 million and 1 in 20 million. There are around 30 million adults in the country, which means only 2 or 3 will win big. These aren’t good odds. Play a few lottos for fun, but don’t count on making a million or spend money that you could be putting into your million account!
Generational wealth
Now, you might also be thinking that a million today is not quite what a million was a few years ago, so is it really worth it? Yes, it is! If even a few thousand extra rands makes a big difference to the budget imagine what a million could do? You could clear debts, buy a second property, invest money for your children’s and their children’s education. And how fabulous would it be to leave your spouse or child that money? Who wouldn’t want a million! That’s generational wealth and your million will make a huge difference for generations to come!
Be patient
It seems a long time to reach your million goal, but if you can remember the 2010 World Cup in South Africa you can appreciate how quickly those years can go! Plus, a million is a big number so you do need to take some time to get there. It will be worth it!
