What he said. Really, the main problem with America today is that we have an addiction to "Stuff". We buy crap we don't need like $400 game systems and designer clothes and then complain we don't make enough money to save. The average american saves -0.5%. We should be saving 15% of our income. Remember that by the time you retire, you should have NO Debt, including your House. You can live off a lot less money if you have absolutely no debt and pay cash for everything. My wife and I are now on this principle and within 1 month we'll have only the mortgage and her student loan. We're going to triple our payments on her student loan to get it payed off in less than 3yrs. Our take home pay is about 75K total with 2 kids, both in daycare. (daycare at 1k a month). We're also paying extra on our mortgage and we'll have the house done in about 15yrs. In 3 yrs we'll start paying extra on our home and put about 2k a year into an ESA for each kid. The trick is to handwrite a budget each month. Include savings into your budget. We save $100 each month for Christmas, and put 75$ a month for special occasions (b-days etc) so by the time these Christmas ect..comes around, we have plenty of money to pay cash. At our rate, we'll have probably close to 2mill by retirement & with compound interest we'll be able to live off of the interest alone & not touch the principle. But this only works if you have NO DEBT of any kind. You should always have about 6 months of expenses in a savings account for emergencies. Sorry, but I watched my grandmother go without important medication because all she had was social insecurity and I refuse to live like she did.
Find work that you like. Spend less then you make. And set aside a bit each year (I like the 10-15% rule). I wouldn't worry about absolute numbers unless that's your thing. Certainly not at age 30! I've seen lots of people with very modest retirements who's lives I envy. Fully enjoying life. Others with lots of money and no joy. I could easily retire on $1M. I'd rather have more. But I'm not going to ruin myself, or my relations to get it.
You can find a good investing calculator here: http://www.daveramsey.com/etc/investmentcenter/index.cfm?Fuseaction=dspInvestmentCalculator According to this, if you invest $250 a month at age 25, averaging 9%, you'll have $1 Million at age 55. 10 yrs later (due to compund interest) you'll have $2.5 million. (at age 65) If I did my math right, you could live off 125K a year (5%) and still make money off of the $2.5 million. Remember, investing is a LONG TERM thought process. The stock market has made money 100% of any 10yr period you look at in history. Think of investing today as buying while things are on sale...yeah they may go down more in the next couple of months, but in the long haul they'll go back up.
It's not what you make, but how much you keep. That said, don't have kids and its a lot easier to keep more of your paycheck.
The question should be "When should I start planning to get my 1st million??" The answer is "yesterday"! If you don't plan to be a millionaire, you won't be one!! The sooner you start planning, the sooner you will get your 1st million. After you start planning, the time it takes to reach $1M depends on you. You have to pay yourself 1st. If married, you and your spouse have to pay yourselves 1st. Invest this money somehow. THIS MONEY CAN NEVER BE TOUCHED!!!! "But I want my kids to have the best of everything!" Who do you want to take care of you in your old age - your kids or yourselves? Whomever you pay 1st will take care you in your retirement! My wife and I both worked. Here are some things we did. 1. We belonged to a credit union at work. We financed our vehicles thru the credit union. When the vehicle was paid off, the credit union kept taking the money out of our pay. They put it into our savings. We learned how to live without vehicle payment. When we purchased another vehicle, we took out another loan. Our 1st was say $200 and after 4 years our 2nd was $300 and was paid off in 4 more years. After 8 years we had $500 a payday going into savings. 2. Employee stock option plans are good. If you don't like pouring money into 1 stock; take the money, not the stock, at the option time and let a finiancial advisor invest it for you. 3. Every time you get a raise, add half the raise to the money you pay yourself. 4. You will at some time need a financial advisor. I didn't use monitary(the $200 & $300 were to illustrate a point) values, because how much you can save depends on how much you can make. By the way, we didn't skimp on the kids. They were in high school band and played sports. Every 3rd year we took a major vacation with them(West Coast, Yellowstone and Grand Canyon etc.). That's how we got to retirement. Hope that helps someone.
It's all about savings. Even if you start making $100k at the young age of 20, most people will spend most of that instead of saving. So say you're able to save $25k out of your salary (which is a lot considering you'd actually have just $70k or so after taxes), after 10 years you're still only at $250k. Invest it as you go along and you're better off but hard to hit by 30. If you keep this up you'll be doing very well at 60 but most people don't save this much. So it takes a good salary and an even better savings plan. I think I'll be able to do it by 40. My end goal is to retire with $5mil.
