First million calculator, how long until you have a million

The road to your first, or fifth, million: calculate how long it takes to reach your goal.

The first million is always the hardest. This calculator shows how long it takes to save up a million, or any other goal you choose, with a given monthly contribution and an expected return.

This calculator shows how long it takes before your savings reach a million, or any other goal you choose. You enter your starting amount, your monthly contribution and the return you expect, and get the answer in years and months.

How to use the calculator

• Goal: the amount you want to reach, 1,000,000 by default.
• Start: what you have already saved or invested.
• Monthly contribution: the amount you put in each month.
• Return: the annual return you expect. 7% matches the historical average for broad stock market investing over long periods.

The result shows the time to your goal and how much of the final amount comes from your own contributions and how much from the return. The chart shows the growth year by year.

How the calculator works

Your savings are simulated month by month. Each month the contribution is added first, and then the whole balance earns one twelfth of the annual return. That way the return itself earns a return, and it is that effect that drives the balance toward the goal. You can read more about how it works in the compound interest calculator.

Example: €2,000 a month

If you start from zero and put in €2,000 a month at a 7% annual return, you reach the million after 19 years and 6 months. On the way there you have put in €468,000 yourself, while the remaining roughly €532,000 comes from the return. More than half of the million is money your money has earned.

The pace picks up noticeably along the way. The first €100,000 takes almost four years, while the last €100,000 takes only just over a year, because by then the return on the large balance adds more than €5,000 a month.

What matters most: contributions, return or time?

Using the example above as a starting point, you can see what happens when you change each setting:

• Higher contribution: €3,000 a month instead of €2,000 cuts the time from 19.5 to about 15.5 years.
• Higher return: 9% instead of 7% cuts the time to about 17 years and 4 months.
• Starting amount: if you already have €200,000 invested, you reach the million in about 13 years.

At the start, your contributions matter most, because the balance is small. The bigger the balance gets, the more the return matters. That is why people say the first million is the hardest: the next one comes faster, because the return is then working on a larger amount.

Taxes and inflation

The calculator works in nominal amounts before tax. In practice, depending on where you live, you may pay tax on your returns, and inflation eats into your purchasing power along the way. At 2% inflation, a million twenty years from now buys about as much as €673,000 does today. You can work out the effect in the future purchasing power calculator.

If you have a fixed amount and a fixed time frame instead, the savings goal calculator works the other way around and shows how much you need to put aside each month.

Sources

The calculator simulates your savings from the numbers you enter and does not fetch any external market data. The result is a guide only and assumes the return is steady over time, which it rarely is in real life.

Frequently asked questions

How long does it take to save a million?

It depends on how much you put in each month and the return you get. If you save €2,000 a month at a 7% annual return, it takes about 19 and a half years to reach your first million. Of that million, €468,000 is your own contributions and the rest comes from the return. Raise it to €3,000 a month and the time drops to about 15 and a half years.

Why do savings grow faster toward the end?

That is the effect of compound interest. At first, almost all of the growth comes from your own contributions, but over time the return on your growing balance adds more and more. With €2,000 a month and a 7% return, the first €100,000 takes almost four years, while the last €100,000 on the way to the million takes only just over a year.

What return is reasonable to assume?

A broad global stock index has historically returned around 7% a year on average over long periods, before inflation, taxes and fees. That is why the calculator starts there. Returns swing a lot from year to year, though, and the average is no guarantee. If you want to be cautious, use 4% to 5%.

Does the calculator account for taxes and inflation?

No. The calculator works in nominal amounts before tax. Depending on where you live, your returns may be taxed, which makes it take longer to reach your goal, and inflation means a million twenty years from now will not buy as much as a million today. You can see what inflation does to the amount in the future purchasing power calculator.

Calculate future purchasing power

How does the calculator work?

The calculator simulates your savings month by month. Each month your contribution is added to the balance, and then the whole balance earns one twelfth of the annual return. The result is the number of months until the balance reaches the goal, converted into years and months.

What does it mean if the calculator says the goal is not reached?

It means your savings never reach the goal with the numbers you chose, for example if both the monthly contribution and the return are set to zero, or if the combination is so low that the goal is more than a thousand years away. Raise the monthly contribution or the return and try again.