How long would it take to reach a monetary goal - $1 Million - Answered

[Darron Stewart]

Everyone has goals and to achieve them we chart a path, with that we all want to speculate when we will hit a goal.  Whether it is with a number of houses, a set income, or a monetary goal.  To figure out the amount of time it will take, there are many ways, an approximation is to use the rule of 72, that provides an approximate time to show how quickly a set amount will double.  So, 72/18=4, 72 is the constant, 18 the variable %, and the end number is the answer in years.  So, lets prove, say we start with savings $31,250.  Investing it in rental or tax liens making 18%, lets see how long it takes to double.  Math, 31,250 x 1.18= 36,875, x1.18= 43, 513, x1.18= 51.345, x1.18= 60,587, so in 4 years at 18% if we reinvest at 18%, we nearly double our money.  The hypothetical question I get and is to see how quickly $1million can be reached.  So, 31.25k, 62.5k, 125k, 250k, 500k, 1M.  Each number is the 4 year step, so in approx 20 (actually 21) years 1M can be achieved if starting with $31,250 and reinvesting at 18%...

So if only 9%, twice as long, if half the starting money add 4 years. 

For the skeptical ones, yes 18% is achievable!  Some tax liens pay that and so can rental properties.  Tax liens are set, so no proof needed, rentals - say 10k is put down and the goal of $150 per month net is reached, then 150x12=1800 and 1800 is 18% of 10,000!

But here is where it gets crazy, lets say you buy just one 100k house with 10k down and use the 1800, plus 8200 saved and buy a second the next year, then 3600, plus 6400 for the third, and 5400, plus 4600 for fourth, 7200, plus 2800 for fifth, 9000, plus 1000 for the sixth, then apply the 10k for 7th-10th and excess toward paying off house one.  If done with 15 year loans, stop at 10 and apply all the profit to paying off house one, then the next and so on, it should be about 21 years and 10 $100k houses are all paid off, once again proving the theory.  But with 3% gain in value, it's closer to $1,046,000, darn the luck over-achiever!

Now set those goals and get to it!