2 min read

Here’s an interesting thought experiment: *How much would you have needed to invest since 2000 to have become a millionaire by the start of 2018?*

Let’s assume you invested all of your savings in an S&P 500 index fund. Here are the S&P 500 annual returns since 2000:

Assuming you invest a lump sum amount at the start of each year, it turns out that you would have needed to invest $22,325 each year in the S&P 500 to accumulate $1 million by the start of 2018:

What if you instead started investing at the start of 2001?

It turns out you would have needed to invest $23,674 in the S&P 500 at the start of each year in order to accumulate $1 million by the start of 2018:

We can extend this thought exercise to all starting years from 2000 to 2010:

Unsurprisingly, the later you started, the more you needed to contribute each year to achieve millionaire status by the start of 2018.

This chart represents these numbers in a slightly different way:

Here is how much of your final $1 million would have been come from contributions vs. investment returns, based on your starting year:

For someone who started investing in 2000, 40% of their final $1 million would have come from contributions. Contrast that with someone who started investing in 2010, who would have had 52% of their final $1 million come from contributions.

**Assumptions used in this analysis:**

-All contributions were made into an S&P 500 index fund

-Contributions were made in a lump sum manner at the start of each year

-S&P 500 Annual returns come from this data source

- My 2020 Annual Review - December 27, 2020
- Be an Owner - November 25, 2020
- What if You Only Bought Stocks After the Market Had a Down Year? - November 4, 2020

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

An additional table showing the total amount invested would be interesting as well.

For example:

year 2000-2017 at 22325*18=401850

year 2001-2017 at 23674*17=402458

year 2002-2017 at 25358*16=405728

And for the record, I find all your charts extremely informative and am impressed at your ability to take data and consolidate it into very easy to understand graphs.

Thanks for the recommendation! Will definitely keep that in mind for future posts 🙂

Hey Zach,

I really like this.

So for just under $2,000 per month for 18 years and you would be a millionaire by now.

For just $1,000 pm and you would be sitting on half a million. Still a sizeable sum.

Very little excuse for most people to become millionaires during their working lifetimes…

This also excludes property and businesses…

Exactly! It doesn’t seem like a huge amount on a monthly basis, but over the course of years it seriously adds up