Everyone wants that coveted title of “millionaire”, right?

I’m going to show you how easy it is for a 2018 high school graduate to become a millionaire by age 60.

First, let me introduce this very real high school student.  We’ll call him P.  P is a 17-year-old high school senior who just got a new job.

Here is P’s income and expenses:

  1. He makes $8.91 an hour
  2. He is starting with 10 hours a week
  3. He spends roughly $150 a month on expenses and fun (gas, insurance, eating out with friends, etc.)

So let’s play around with some numbers and see how quickly he can save $1,000,000.

Using the paycheck calculator over at, I calculated his net pay, or his pay after taxes, etc. get taken out of his paycheck.

P will be bringing home $164.57 every two weeks.  That means in one year, he will have been paid roughly $4,278.82 ($164.57 X 26 pay periods).

He will have spent around $1,800 in that year, leaving him $2,478.82 to invest.

But let’s make it a little simpler, and pretend that P spent a little less than $150 every month.  Let’s say that at the end of the year, he actually has an even $2,500 to invest.

P decides to put his savings in a Roth IRA.  He wants to invest in a low-cost index fund with a historic average return of 7%.

Here’s where the fun begins.

bankrate(Courtesy of Bankrate’s Roth IRA calculator)

Even if he didn’t ever put another dollar in this account, at age 60 he would have $42,861.  His original $2,500 would have become more than $40,000!

But P is clearly a smart guy, so he DOES continue to contribute to his Roth IRA.  Let’s see what happens if he continues to contribute $2,500 each year until age 60:


He would have $662,802!  Notice, he only put $107,500 of his own money in the account!

What if he began increasing his contributions after college, contributing the max amount every year?


P WOULD MAKE OVER $1,100,000 BY AGE 60!  Just by contributing the max to his IRA every year of his career!

Imagine the possibilities if P could save more than $5,500 a year!  Although he would not be able to contribute more than $5,500 to an IRA, he could contribute to an employer plan (401(k), 403(b), etc.) or just a taxable investment account.

If he also began maxing out a 401(k) or similar employer plan, he would be a millionaire way before age 60.  Dare I say he could be an early retiree?

I’ll explore P’s early retirement options in next week’s post, so subscribe below to get an email when that one comes out. 

The Power of Youth

P’s investments were able to grow to such great sums because he started investing young.  As we get older, we have fewer years to invest, so we can’t take advantage of all of that compound growth.

To demonstrate this, let’s look at what would happen if P decided to wait until he was 27 to start investing:


Even if he began maxing out his contributions at 27, he would only have a little more than $700,000.  That’s more than $400,000 less!  What a big difference 10 years can make!

And if he waited another 10 years?  Oh boy, this is where it really starts to hurt.


He would have less than $330,000 saved for retirement.  That’s not a very good nest egg, is it?

Here’s the point of this whole post:  The younger you can get started saving and investing, the better.

We often don’t think about investing when we’re young because 1) we weren’t really taught about investing in school and 2) we don’t have very much money.

But remember, my young high school students…at no other point in your life will your expenses be so low.  Save every penny you can now, so your money will have years and years to grow.  At some point, your money will be making more money than you are making at your job.  And at that point, you have gained a level of financial freedom that not many people get in their lifetime.

Come back next week to see how P’s investment portfolio could look if he decided to pursue early retirement.

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