Smart Women Tip #10: It’s Never Too Late to Become a Millionaire

In our recent Smart Women Survey, almost 38% of women said that their biggest challenge is money or their finances.  Today, I want to share something that happened to me last week when I went to visit my hairdresser, Rachel DeMar.


Rachel told me that she was celebrating her 10 year anniversary since she received her chair (as a hairdresser).  After congratulating her, I asked her if she had ever set up that retirement account we talked about a few years ago.  I had suggested that she talked to her bank about setting up a Roth IRA.

She hadn’t, so I said let’s take a look at how much she would have today had sheset up a savings account 10 years ago at 22 years old.  I asked her how much could she save a day in her tips.  She said she could easily save $20.  I said so let’s assume you saved $20/day five days a week for the last 10 years and assumed a 10% rate of return.

I pulled up David Bach’s Latte Factor Calculator on Google and inserted the numbers.  I told her it would be $91,000. Now of course, this is just a hypothetical return, but I wanted to make a point.

Now the other ladies stopped working and were gathering around.  Then I told her, “What if we started today and saved that same $100 per week for the next 30 years or until she was 62 and used the same 10% hypothetical return?”  The total was $940,000.  They all like this.

Then I said, “Now let’s pretend you did start that account 10 years ago and had that $91,000 today and decided to never save another penny, but just let that 91,000 grow in a retirement account and it earned 10% every year for the next 30 years.  How much would that grow to?”  The answer surprised them all.  It was over $1.500,000 or 1.5 million dollars.  Remember, this is using a hypothetical return and actual returns are based on the investment choices and their actual returns

You may be asking what if I am 40 or 50 years old?  Is it too late for me?  It’s never too late to become a millionaire.  You just need to save more.

Here is a chart that shows the value of starting early as well as how it’s still possible to become a millionaire by age 65, if you start now.  Again, I used the same 10 annual rate of return to be consistent

Age                                                        Daily Savings                                       Yearly Savings
20                                                                  $4.00                                                        $1,460

30                                                                  $11.00                                                       $4.015

40                                                                  $30.00                                                       $10,950

50                                                                  $95.00                                                        $34,675


There are 3 secrets to building financial security and creating wealth.  It’s never too late:

  1. Start now and be consistent.  Remember, it’s never too late.
  2. Pay yourself first.  Create a budget and put yourself at the top of the list.  Make sure you are paying yourself before you spend money on anything else.
    • I suggest beginning with saving 10% for emergency or a cash reserve until you have six months built up.  And keep adding to this because you know you will be dipping into now and then for emergencies. That’s what it’s for.
    • Then set up a 2nd savings account for fun.  This includes your long term goals like big ticket items, vacations, and things for your home.
    • The third is one you will never touch. and I would put at least 10% or more (see the chart above).  This is the account you will be building for your retirement.  You will want to meet with a financial person about setting this up because the other accounts can be simple bank accounts. This is the one you will want to create as your investment portfolio.
  3. Never give up.  No matter where you are today, all you need to do is get started.  Get help if you are in debt. There are options for you.  Start saving something every day, every week, even if it’s just $10.  Create a vision board, create a budget, meet with a financial planner.  Get help.  It’s out there for you.  Read a great book about money like Barbara Stanny’s “Over Coming Underearning”.

I hope this article is inspiring for you.  Please share it with all the young people. Starting early and being consistent is the biggest secret.  But start now!

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