How can I turn $100,000.00 a year into $2,000,000.00 in 15 years?

Question

I am 40 years old now and when I'm 55 or so years old, I wouuld like to have at least $2,000,000.00 + for retirement. I make around $100,000.00 + a year now.

Answer 1

With your current $100,000 a year lifestyle, you might find it difficult to maintain your standard of living past your 70s and 80s with just 2 million in the bank. I would think you need to at least double it to account for inflation, cost of living, etc. medical and long term care and whether you are living debt free and in a relatively reasonably priced area of the country. At the very least, don't stop investing once you hit the $2m

Besides adding to what other retirement accounts you may have, I suggest you open a self directed IRA or 401K which offers the tax benefits but allows you to directly manage how those funds are invested, including investing the money in a business or real estate. Which can be in conflict with IRS rules if not done properly.

I suggest www.guidantfinancial.com if you are interested in going that route and learning about the opportunity.

Real estate, whether through your IRA or otherwise is probably your best alternative. Not necessarily buying rental properties and managing them on your own. This would, however, be the time to buy if you are considering long term real estate investment since in a large part of the country we are entering or have been in a buyers market. Prices are low but will probably be stagnant in some areas for some time. Again, this is the time to buy if you can afford to hold them long term. When prices rebound, holding 10-20 well purchased homes would certainly add to your net worth in 15 years not only in equity but added income.

If you bougtht a home today and financed $100,000 at 7%. In 15 years, the prinicipal balance would be @$74,000. The home's value I would think would have to adjust to at least $150,000 assuming it is maintained and the neighborhood remains stable leaving you an equity position of $76,000 in the property. Multiply that by 10, 15 or more and that would get you at least half way there. Account for depreciation and tax benefits and it could easily get you 2/3 of the way or more.

You might consider commercial properties instead. Either the actual buildings or just the ground leases. Generally a lot less headaches with longer term tenants. The downside: harder to replace if you lose a tenant.

If you can risk a $10K stake or more, I would also recommend forex trading which by the way is over a 2 trillion dollar daily market. Very difficult to manage, except I found a great software program that takes all of the guesswork out of it. Visit www.freedomrocks.com

At the very least you will learn a little about that alternative to the stock market. You can actually pick your own interest rate. Of course the higher the return, the greater the risk but there are failsafes in place.



Hope that helps. GOOD LUCK

Answer 2

max out your 401k (14k this year) and make maximum contributions to a regular or roth IRA as well...
the prospects are not looking all that great.. I just did a quick calculation on the retirment calculator at ...
http://www.bloomberg.com/analysis/calculators/retire.html#results
this one says that starting with a retirement balance of $0 at age 40, you will need to contribute $53,648.48 per year with a steady rate of return of 12% to get to a total of $2 million by age 55...

You made no mention of what you currently have in any type of retirement fund.. like an employer sponsored 401k or an IRA account..
the numbers change dramatically based on current savings...
If you already have $100,000 set aside you will only need to contribute $38,966.06 yearly to something relatively stable like an index fund..
Whatever you do.. stay away from the temptation to jump on a fad stock or industry..
your dream of retiring early might turn into a nightmare of having to work until you are 80 .. what fun is that :)
I did not take into consideration any kind of Social Security benefit for the calculation..

Answer 3

Bring it to vegas, double or nothing. Seriously though, try to invest in some buisness.

Answer 4

Print it.