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Hard Work + Smart Investing + Frugality = $1,000,000

CNN Money has a slideshow called “Meet the millionaires [3]” in which they share a bunch of infographic-type statistics about millionaires. Most of it is “personal finance porn,” that is it’s interesting to read but not really valuable to the average person… except slide 3 [4].

Slide three answered the question of how the millionaires “got there” and here were the responses:

Hard work, smart investing, and frugality were the top three answers and the ones given by the vast majority of millionaires. Those are all three things that anyone can do and with enough time, a million dollars is not that absurd a sum to save over a long period of time.

If you had an investment that returned 5% over 40 years, you could reach a million dollars if you saved $8,278 a year. That’s about $690 a month. If your returns were 7%, you’d have to only save $5,009 a year, or $417 a month. It won’t be easy to find $417 or $690 a month to save, but through frugality and hard work, it’s probably within reach or at least psychologically feasible. Maybe not today, maybe not tomorrow, but $417 is a more manageable number compared to $1,000,000.

Incidentally, the median price of a millionaire’s car is $31,400 and 90% of them graduated college.

(Photo: tobanblack [5])