The Most Easiest Strategy to be an Millionaire.
Saving Method
This strategy is simple. What you need to do is just putting money aside, bit by bit.
Saving usually means putting your money into a savings account, such as a bank normal savings account, fixed deposit, or money market fund in a finance institute.
You can save your money in Money Market Fund which is an alternative to a fixed deposit which,
- enjoy fixed deposit-like rates
- no lock-in period
- no services/sales charges
- next business day withdrawals
Investing Method
Investing
This is taking some of your money and trying to make it grow by buying products that might increase in value over time. For example, you might invest in stocks, property, unit trust fund, or shares in a fund.
While the gains from investing can be bigger than saving, the value of investments can go down as well as up.
Growing your nest egg considerably will take investing your money.
Here’s how much you should invest each year to become a millionaire by the time you retire.
Want a RM1 Million Nest Egg?
Many people dream of having RM1 million or more to their name. Now the reality is that you don’t really have to fixate on an RM1 million nest egg.
If you do want to hit that RM1 million goal, then it’ll help to know how much money you need to sock away each month in a One Million Ringgit Plan to make that happen.
Of course, there’s no easy answer to that question, as it will depend on variables such as the length of your savings window and the way you actually invest your money.
But you may be pleasantly surprised to learn that it’s possible to have an RM1 million nest egg by setting aside just RM300 a month in unit trust investment.
Let’s try figure out it!
One Million Ringgit Simulator
How to Become a Millionaire
You don’t need a six-figure job or family money to become a millionaire. Instead, you need to start saving early and be mindful of every dollar you spend. Here are some tips for building that million you need to retire in style or to retire early.
How much do you need to save?
Over the last 94 years, investing in a S&P500 would’ve earned you a 10.09% average rate of return.
If you invested RM100 per month for 30 years and earned this rate of return on average, your accounts would’ve grown to RM226,000.
Double your savings to RM200 per month and earn the same rate of return, and your accounts would end up being worth RM452,000
and if you can invest RM450 every month, they could grow to nearly RM1 million.
Risk vs Return
But investments in only equities are among the riskiest of asset allocation models. You are compensated for that extra risk with a higher rate of return, but it comes with more volatility. And from year to year, this type of investment will have higher highs and lower lows, like in 2008 when the S&P 500 was down 37%, or 2013 when this index was up 32%.
Risk tolerance and portfolio mix are major factors in getting to RM1 million, and they’ll differ depending on the investor.
But if there’s one universal that applies,
”The portfolio should be diversified among large- and small-company stocks, domestically as well as in established foreign countries and emerging markets,”
says Kenneth Moraif, senior advisor at Money Matters in Plano, Texas
The appropriate allocation in each of these asset classes will be determined by the investor’s time horizon, current assets, and age.
Diversify
You know the saying that goes
“Don’t put all your eggs in one basket”?
Well, in this case, reduce your investment risk and don’t invest all your money into one investment. Unit trusts diversify your investments in more than 50 public listed companies from various sectors such as consumer-based products, oil and gas, palm oil, health, communications, and more. There are also unit trusts that do investments abroad.