How to Get Rich, in a Word: Save
NEW YORK (TheStreet) -- How do you become a millionaire? There are many ways, of course, but to hear millionaires themselves tell it, saving is the most common path, beating out investments, inheritance or marrying a sugar daddy (or mama).
That's what PNC Financial Services Group found when it interviewed 923 millionaires last fall. The findings may prove heartening to ordinary folk seeking financial security, even if they don't attain millionaire status. It seems there's no magic formula, and saving is a technique available to anyone who's not living paycheck to paycheck.
Asked what "decision" had most influenced their financial success, 56% of those polled cited saving early and regularly. Next came controlling spending and good investment decisions (each named by 38%), followed by earning a lot of money (26%), inheriting (12%) and marrying someone with money (3%). (The figures add up to more than 100 because some millionaires credited more than one factor.)
Asked a slightly different question about the "influences" that helped them become millionaires, 65% said hard work, 16% said good decisions, 8% said discipline and 7% said luck.Savings Goal Calculator, you can find two ways to accumulate $1 million over 30 years. With a 12% return, you could get there by saving $325 a month. But since 12% would be hard to achieve, you could also get there with an 8% return if you increased your monthly saving to $705. In other words, by saving more, you can reach the goal with a more modest return -- one that would be easier to achieve, and with less risk. If returns were better than expected, well, you'd just hit your goal sooner, or build a bigger nest egg. And the millionaires are also right about the value of starting early. To get a million by age 65 with an 8% return, you'd need to save $308 a month if you start at 25, but $1,093 a month if you wait until 40. risk, as bank savings and other cash holdings earn almost nothing. But an investor who doesn't want to become a stock market expert can pick from a wide array of fire-and-forget options such as index-style mutual funds and target-date funds, products that will grow in pace with the broad stock and bond markets.
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