How You Can Become a Millionaire With Only $81 Per Month

The investment journey usually seems the hardest when you’re just starting — you don’t have success to fall back on yet, making market volatility like what’s been happening lately feel more intimidating.

But don’t fret. Investing is a lifelong journey that’s most healthy and fulfilling when it happens slowly and steadily over the years, through many ups and downs in the market.

Breaking down your dreams into smaller, short-term goals can completely change your mindset. You can start from nothing and become a millionaire for as little as $81 per month. How? I’ll walk through the simple math of building wealth.

Surprised person looking at a laptop screen.

Image source: Getty Images.

A word on volatility

The S&P 500 has generated average annual returns of 10.5% since the early 1900s. That’s not to say that 10.5% is what investors see — instead, it’s a long-term average based on the year-to-year volatility in the stock market. As shown in the chart below, the S&P 500 has been a bit of a roller coaster over the past year, up one day, down the next.

^SPX Chart

^SPX data by YCharts.

Now zoom out to the following chart and see how smooth the journey becomes over 10 years. Sure, the S&P 500 has the occasional hiccup, but the index has gone up over time.

^SPX Chart

^SPX data by YCharts.

Understanding this and having a long-term strategy will give you the mindset to succeed as an investor. You will begin to look at your portfolio the same way, feeling the occasional setback but well aware of the progress over time.

The cheapest path to millionaire status

Now, meet Pat, who’s about to turn 21 years old. They want to invest, but still, in college, they don’t have a lot of money. Fortunately, their youth offers them a very affordable path to wealth.

All Pat needs to do is invest $81 per month into a portfolio of diversified index funds and ETFs that mirror the S&P 500. At a 10.5% annual rate of return, they will reach $1 million on their 65th birthday, 44 years after they started.

Is $81 per month a lot of money? If you break it down into a smaller goal, it’s the same as saving about $2.70 per day. That’s less than what my local coffee shop charges for a basic hot beverage, and it’s far less than the meal combo I order at my favorite fast-food restaurant.

The best part is that Pat doesn’t need to invest more as they age and become successful; the power of compounding is already taking care of them. Of course, they will get to their goal faster if they invest more, but they’ve set a very low “bar” to hurdle financially.

But what if you start later?

I wish I had realized this when I was younger because I certainly didn’t start investing at 21. So if you’re like me and missed the “easy” route, don’t worry; it’s a matter of adjusting the math.

If you have the same goal of having $1 million at age 65 but don’t start investing until 35, you need to invest $356 per month. You can see how much more lifting it requires when you start later, so today is the best time to start investing.

But still, $356 per month isn’t unrealistic for many. The average new car payment in America is $609 per month, and most people don’t blink at cutting that check.

Finally, let’s say that you’re 50 and only now are getting serious about your retirement. It’s not ideal, but many people are well into their careers without proper retirement savings. In this case, you would need to invest $2,115 per month.

You’re probably at your peak earnings years at this point. However, this is still a lot of money for most people. Budgeting and side hustles can help you hit this number if you’re having trouble affording this. Side hustles are nearly endless; delivering pizza on the weekends alone could cover more than half of this. Yes, the lifting is heavier the older you get, so what’s the take-home message? Get started.

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