How long will it take you to accumulate 1 Million pesos?


Remember my post about 1Million in 23 years? Click here to read the full article. If you want to have 1 million pesos in 23 years, you should start investing Php1k a month now in an investment vehicle (i.e mutual funds, stocks) that grows 10% on an average every year. 

But what if you can save Php2k or even Php5k a month? Do you have any idea how long will it take you to build up a million pesos?

Take a look at this table.

MONEY
INTEREST
(Annual Rate of Return)
(Monthly Savings)
4%
6%
8%
10%
          Php 1,000
37
31
26
23
2,000
25
22
19
17
3,000
19
17
15
14
4,000
16
14
13
12
5,000
13
12
11
10

TIME (No. of Years)













Time, Money and Interest: How does it work?

If you increase your savings to Php2k a month and put it in an investment vehicle that grows 10% compounded annually, it will take you 17 years to have a million pesos. Php3k monthly will produce 1 million after 14 years. But if you religiously save as much as Php5k a month and put it in Equity Funds (Mutual Funds) or stocks that on an average grows 10% yearly, it will only take 10 years to generate your one million.

Conclusion

As you increase your monthly savings, and as you increase the rate (better-than-inflation) of return, then it takes you a shorter period to accumulate the 1 million pesos.  

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