Picking up Nickels

Tuesday, October 10, 2006

When will I be a millionaire? Part II

As I mentioned yesterday, I have a chance to become a millionaire in April 2014. That made me wonder what my financial position was like when I look back over the same time period, taking me back to April 1999.

In April 1999, I had assets totaling $104,898 ($43,418 taxable $61,480.69 tax-deferred). With my September 2006 asset total of $447,986, that gives me an asset growth rate of 327% over the last seven and a half years! Although I haven't broken out new contributions vs gains during that period, I believe that the majority of this growth has come from investing new money in mutual funds during the stock market slump in 2002-2003.

While I haven't crunched all of the numbers, my theory is based on the behavior of a 401k account of mine from a former employer (which I haven't contributed to since 1999). While my overall asset total has grown by 327% since April 1999, this 401k account has only grown by 42% over this same time period (including 31% over the past two years).

Even though my asset total has grown to a pretty nice level so far, I am convinced that continuing to add new money to my savings and investments is just as important as growth via compounding. I will be counting on growth in both areas (and a little luck wouldn't hurt) if I want to become a millionaire by 2014.

"The future belongs to those who believe in the beauty of their dreams."
Eleanor Roosevelt


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