How Long to Become a Millionaire?
Calculating financial independence
Day 37
When I was a kid, I confidently told my grandmother that I’d be a millionaire by 30.
Ambitious? Yes.
Accurate? Not even close.
Now that I'm well past 30 (cough cough), I’m more determined than ever—and this time, I have a plan. If you’re new here, I’m building a 30-stock portfolio of dividend growth stocks from scratch.
Why Dividend Growth Investing (DGI)?
DGI offers two powerful advantages:
Quality Companies: Businesses that consistently grow their dividends are typically high-quality and appreciate over time, compounding your investment.
Passive Income: Dividends are like paychecks, and growing dividends are pay raises that build quarter after quarter.
It’s a win-win strategy. With DGI, you can retire by living off dividends while keeping your portfolio intact.
The Million-Dollar Goal
Here’s the catch: to live off dividends, you need a substantial nest egg—at least $1 million. Why? Let’s do the math:
A $1M portfolio with a 4% dividend yield generates $3,333/month pre-tax—about $40K/year.
That might be enough for early retirement depending on your debt and other factors like your savings and 401(k).
My Plan
Starting with an initial investment of $50,000, contributing $500/week, and assuming an optimistic 12% annual return (Including dividends), I’d hit millionaire status in 14-15 years. That's not bad, but sure would be nice if we could speed the timeline up!
To speed things up, I could reinvest bonuses or side hustle income when possible. Or–I could lower my goal to $800K or $900K if that seems realistic. Obviously, a lot of things have to fall into place to hit this goal. It will be fun trying, right?
Your Journey
How long will it take you to become a millionaire? Let’s run some scenarios based on monthly contributions at a 10% annual return (the market's historic average):
$250 monthly contributions = 35 years
$500 monthly contributions = 29 years
$1,000 monthly contributions = 23 years
$2,000 monthly contributions = 17 years
$5,000 monthly contributions = 10 years
Get Started Right Now!
If you’re young, this should be some exciting news. Starting small ($250ish/month) can still lead to big results over time. For late starters like me, higher contributions are key to catching up.
Final Thoughts
Becoming a millionaire takes time and effort—but even halfway there would be impressive, right? A $500K portfolio with a 4% yield provides ~$1,600/month in passive income. Not bad for simply being a shareholder.
Ready to crunch your own numbers? Try tools like NerdWallet’s investment growth calculator to map out your path.
Until next time… keep walking!
Jeremy ✌️