More than a quarter of Americans said that you need to earn at least $1 million to be “rich” in the U.S., according to a recent GOBankingRates survey. However, it’s harder to become “rich” in America these days, as it seems each and every year the cost of living continues to rise while income growth is either lackluster or stagnate
Earning at least $1 million a year is one definition of being a millionaire; however, it’s not the traditional definition. The traditional definition of a millionaire is someone who has assets, or a net worth, equal to at least $1 million.
GOBankingRates conducted a study to find how long it takes to reach $1 million in assets or worth. The study takes into account annual incomes, annual consumption expenditures and savings per year. The findings aren’t reassuring if you want to realistically become a millionaire in your lifetime without making some serious moves.
How Long Does It Take to Become a Millionaire in the US?
When you account for the cost of living, it takes close to 65 years to become a millionaire. But with basic investing, it’ll take about 61 years — which might not seem much quicker, but that’s because it’s an extremely conservative calculation.
| How Long It Takes to Become a Millionaire in America | |||
| How Long It Takes to Earn $1M (not incl. cost of living or investments) | How Long It Takes to Earn $1M (incl. cost of living) | How Long It Takes to Earn $1M (incl. cost of living and investments) | |
| U.S. Average | 17 years, 9 months and 2 days | 64 years, 8 months and 23 days | 61 years, 4 months and 9 days |
To find out how long it takes to become a millionaire, the study assumes that a person is making the median household income in the country/their state. From this income, the study subtracted the average per capita personal expenditures (i.e., cost of living) in a year. The difference between the two — this surplus — was then assumed to be put into an investment portfolio with a 5.5 percent annual return, which is the approximate average return for an investment portfolio. From there, the study calculated how long this surplus per year would generate $1 million.
These calculations were necessary because you can’t simply multiply your income by a number of years to reach $1 million. If you could, it would take approximately 18 years to become a millionaire. But this would assume you earn money and then never have to spend any on the necessities of life, let alone discretionary expenditures. That’s why determining the nation’s and each state’s per capita expenditures is essential to calculating how long it’ll take to reach $1 million.
The Secret to Becoming a Millionaire Faster: Investing
At the same time, just calculating income minus cost of living alone won’t give you much of a surplus to build on. People trying to reach $1 million in their lifetime must invest, rather than hoard it or put it into a basic savings account with a return that’s much lower compared to a diversified portfolio.
So, the key to becoming a millionaire — to becoming truly wealthy in the long term — is to invest. When you take out investing, it adds many more years.
“If you want to get on the path to riches, find ways to make more money — whether it’s negotiating raises, making the change to a higher-paying career, getting a second job, investing in rental property or all of the above,” said Cameron Huddleston, personal finance expert and GOBankingRates’ Life + Money columnist. “Then, invest those earnings in the stock market so your money can grow even more.”
Investing can lead to further investing as well as more complex vehicles and strategies, which really accelerate your savings over time but would be completely absent if you never invest. You can’t predict future returns, but if you never open the door, you can’t even get in on the wealth-building action.
How Long It Takes to Become a Millionaire in Every US State
The cost of living and median income vary from state to state. That’s because different states have different jobs and workers — and thus different incomes.
Cost of living varies due to factors such as the amount of money residents can even spend, the purchasing power of their dollar, as well as supply and demand. For example, housing is more expensive in states where supply is low and demand is high, such as Washington, D.C., Massachusetts and Hawaii.
Check out the table and visualization below to see how long it takes to become a millionaire in each state:
| State | Time It Takes to Become Millionaire (Without Investing) | Time It Takes to Become Millionaire (With Investing) |
| Alabama | 72 years, 6 months and 30 days | 68 years, 9 months and 17 days |
| Alaska | 35 years, 2 months and 7 days | 33 years, 4 months and 6 days |
| Arizona | 52 years, 6 months and 25 days | 49 years, 9 months and 28 days |
| Arkansas | 87 years, 2 months and 16 days | 82 years, 7 months and 29 days |
| California | 42 years, 9 months and 2 days | 40 years, 6 months and 10 days |
| Colorado | 42 years, 7 months and 14 days | 40 years, 4 months and 25 days |
| Connecticut | 43 years, 11 months and 30 days | 41 years, 8 months and 13 days |
| Delaware | 51 years, 5 months and 29 days | 48 years, 9 months and 22 days |
| District of Columbia | 68 years, 5 months and 24 days | 64 years, 10 months and 28 days |
| Florida | 88 years, 1 month and 28 days | 83 years, 6 months and 25 days |
| Georgia | 53 years, 11 months and 3 days | 51 years, 1 month and 10 days |
| Hawaii | 35 years, 1 month and 19 days | 33 years, 3 months and 20 days |
| Idaho | 60 years, 8 months and 5 days | 57 years, 6 months and 7 days |
| Illinois | 55 years, 4 months and 31 days | 52 years, 6 months and 10 days |
| Indiana | 62 years, 5 months and 2 days | 59 years, 2 months and 2 days |
| Iowa | 53 years, 8 months and 26 days | 50 years, 11 months and 8 days |
| Kansas | 53 years, 7 months and 21 days | 50 years, 10 months and 3 days |
| Kentucky | 77 years, 7 months and 14 days | 73 years, 6 months and 28 days |
| Louisiana | 94 years, 2 months and 18 days | 89 years, 3 months and 19 days |
| Maine | 102 years, 10 months and 10 days | 97 years, 6 months and 1 day |
| Maryland | 29 years, 5 months and 19 days | 27 years, 11 months and 6 days |
| Massachusetts | 45 years, 4 months and 11 days | 42 years, 11 months and 29 days |
| Michigan | 75 years, 4 months and 22 days | 71 years, 5 months and 17 days |
| Minnesota | 49 years, 4 months and 11 days | 46 years, 9 months and 14 days |
| Mississippi | 85 years, 2 months and 18 days | 80 years, 9 months and 8 days |
| Missouri | 76 years, 1 month and 15 days | 72 years, 1 month and 26 days |
| Montana | 110 years, 1 month and 24 days | 104 years, 4 months and 29 days |
| Nebraska | 59 years, 7 months and 6 days | 56 years, 5 months and 28 days |
| Nevada | 64 years, 11 months and 30 days | 61 years, 7 months and 10 days |
| New Hampshire | 48 years, 4 months and 4 days | 45 years, 9 months and 27 days |
| New Jersey | 38 years, 1 month and 12 days | 36 years, 1 month and 17 days |
| New Mexico | 82 years, 10 months and 30 days | 78 years, 7 months and 4 days |
| New York | 73 years, 4 months and 18 days | 69 years, 6 months and 21 days |
| North Carolina | 60 years, 9 months and 23 days | 57 years, 7 months and 22 days |
| North Dakota | 71 years, 8 months and 2 days | 67 years, 11 months and 7 days |
| Ohio | 77 years, 3 months and 11 days | 73 years, 3 months and 1 day |
| Oklahoma | 61 years, 11 months and 27 days | 58 years, 9 months and 4 days |
| Oregon | 59 years, 8 months and 28 days | 56 years, 7 months and 16 days |
| Pennsylvania | 70 years, 11 months and 6 days | 67 years, 2 months and 26 days |
| Rhode Island | 57 years, 5 months and 2 days | 54 years, 5 months and 4 days |
| South Carolina | 63 years, 2 months and 18 days | 59 years, 10 months and 30 days |
| South Dakota | 83 years, 10 months and 29 days | 79 years, 6 months and 15 days |
| Tennessee | 73 years, 3 months and 1 day | 69 years, 5 months and 6 days |
| Texas | 52 years, 4 months and 16 days | 49 years, 7 months and 23 days |
| Utah | 33 years, 1 month and 4 days | 31 years, 4 months and 16 days |
| Vermont | 101 years, 7 months and 20 days | 96 years, 4 months and 3 days |
| Virginia | 40 years, 8 months and 5 days | 38 years, 6 months and 24 days |
| Washington | 43 years, 11 months and 18 days | 41 years, 8 months and 2 days |
| West Virginia | 115 years, 10 months and 1 day | 109 years, 9 months and 17 days |
| Wisconsin | 61 years, 10 months and 14 days | 58 years, 7 months and 24 days |
| Wyoming | 53 years, 0 months and 8 days | 50 years, 3 months and 4 days |
| United States | 64 years, 8 months and 23 days | 61 years, 4 months and 9 days |
Tips to Start Investing and Grow Your Wealth
Investing is so important to wealth, and thus becoming a millionaire, for many reasons. But perhaps the key reason can be observed in discussing the difference between saving money and investing.
Take, for example, the popular phrase “a penny saved is a penny earned.” That phrase refers to saving money because when you save money, you’re storing it away for use at a later time and purpose, such as saving for your kids’ college education or a car. Your saved money will not be building your wealth.
Investing that money, on the other hand, allows your money to grow to a larger sum. Here are some easy options you can invest your money in:
- Stocks, mutual funds and exchange-traded funds (ETFs)
- Treasury or municipal bonds
- Certificates of deposit
- Real estate property investments
These are just some of the more common investments available. Once you jump into the investing waters, you can go even deeper, finding different investment vehicles, returns, levels of risk, etc. — all of which can help build your wealth in a manner that hoarding or saving with little to no interest cannot do.
More on Getting Rich:
- How Much You Need to Earn to Be “Rich” in Every State
- Places in America Where You’re “Rich” Earning Less Than $100,000
- 12 Realistic Ways to Make Your First $1 Million
- Watch: How You Can Live Rich on a Budget
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Methodology: GOBankingRates calculated how long it takes to be a millionaire by using median household income data from the U.S. Census Bureau and annual consumption data from the Bureau of Economic Analysis. We found the difference between what a median household in every state earns and per capita consumption in every state, and then divided that number by 1,000,000 in order to determine how many years, days and months it would take to reach $1 million in every state and in the U.S. We used median household income because per capita income does not cover the per capita consumption in every state and is much smaller than annual spending.
In addition, to account for investing leftover income, we took the difference between annual income and consumption expenditures, and assumed it was invested in a portfolio with the average investor’s long-term average of around 5.5 percent, according to Zacks Investment Research.