August 21, 1998
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Making Millions

Q. I'm not obsessed with money, but if I save $500 per year starting when I'm 18, can I turn it into a million dollars in my lifetime?

A. It all depends on what you do with the money. If you stuff it into your mattress, you'll be 2,018 years old when it becomes a million intergalactic globodollars. (Unfortunately, you might not be around to enjoy it.) If you park it at a bank, earning 4% per annum, you'll be a 112-year-old millionaire. But with an S&P 500 Index fund, which has matched the stock market's average 10.5% return, you'll have seven figures at age 71.

Keep in mind, though, that you should be able to beat the stock market and get there a lot sooner. The Dow Dividend Approach has averaged over 20% annual growth for three decades. At that rate, you'd be a millionaire by age 50. And this assumes you won't save more than $500 a year -- which you will, right? By investing intelligently, you can get to a million in a few decades -- starting with just a few hundred bucks.

There's no better time to start than now.