MOST of us have dreamed of one day becoming a millionaire.
Now you can see exactly how long it would take you to become one. This interactive calculator shows how much you’d need to put away each year to save a seven-figure sum.
And some of us might be rather old, if we continue at this rate.
Others may be surprised to see that it is not necessarily an impossible fantasy. Not only does the calculator show the importance of starting early, it underlines what a difference a high interest account can make.
Michelle Hutchison, money expert at finder.com.au, told news.com.au: “It’s common for people to underestimate the value of a decent interest rate on their savings and this calculator really shows how big a difference it can make.
“For instance, if you are 25 years old and have $10,000 sitting in your transaction account earning next to no interest (0.1 per cent), and you save $1000 per month, it will take you about 79 years to reach millionaire status.
“If you were using an average savings account with 3 per cent interest, you would be a millionaire in 41 years — that’s about half the time.” Australia has more than 1.25 million US-dollar millionaires — 7.37 per cent of all adults, according to a Global Wealth Report by Credit Suisse.
That’s if real estate is taken into account, which shows that putting your money into a home can vastly increase the speed at which you can save. Australians on average have 60 per cent of their assets in property, the second highest in the world after Norway.
The average Australian adult was worth more than US$225,000 ($256,211) in June 2012, the highest in the world for the fifth year running. And we come second in terms of net wealth — total assets minus outside liabilities — at $US431,000, just behind Switzerland on $US581,000.
Just 6 per cent of Australians have wealth of below US$10,000, compared with 29 per cent in the United States and 70 per cent for the world as a whole. Australian full-time adults earn $1516.90 per week on average, an ABS survey revealed.
Yet this isn’t reflected in our saving efforts, with the average household putting away just 9.4 per cent of its earnings, according to finder.com.au. If you want to hit the jackpot, you had better start work on your plan of attack.