Ramit Sethi shows how investing $14 a day from age 25 to 65 grows to over $1 million at a 7% return. He recommends raising your contribution rate by 1% each year to build substantially more wealth over time.
$425 per month
About $14 a day
Start age 25, end age 65 (40 years)
7% return
0.1% management fee
If you invest $425 a month, or basically $14 a day starting at the age of 25, you will easily be a millionaire by the time you're 65. Look at the math. In 40 years, with a low 0.1% management fee, assuming a 7% return, you'd have over a million dollars. Now, one of the easiest ways to do this is to increase your investment rate by 1% per year. For example, if you first contribute 5% of your income, create a little rule for yourself. The next year contribute 6%, then 7%, and every year increase it by 1%. That single would make you hundreds of thousands of dollars more than all the lattes you will ever buy in your entire life.
