I came across the chart shown below in a book I am reading called “The Millionaire FA$TLANE“. The third column came as no big surprise given it is all dependent upon an average annual salary. However, the last column really threw me for a loop and put things into perspective. The whole EARN vs. SAVE equation is definitely worthy of discussion. Obviously, the data tells us that saving $1MM in your lifetime is not an easy task.
| Career/Job |
Average Annual Salary |
Years to Earn $1MM |
Years to SAVE $1MM |
|
| Architect |
$64,000 |
16 years |
156 years |
|
| Auto Mechanic |
$34,000 |
30 years |
294 years |
|
| Bartender |
$16,000 |
61 years |
625 years |
|
| Carpenter |
$37,000 |
27 years |
270 years |
|
| Software Engineer |
$80,000 |
13 years |
125 years |
|
| Secretary |
$38,000 |
27 years |
263 years |
|
| Hairdresser |
$22,000 |
47 years |
454 years |
|
| Teacher |
$46,000 |
22 years |
217 years |
|
| Pharmacist |
$95,000 |
11 years |
105 years |
|
| Police Officer |
$48,000 |
21 years |
208 years |
|
| Physical Therapist |
$66,000 |
15 years |
152 years |
|
| Veterinarian |
$72,000 |
14 years |
139 years |
|
| Source: US Bureau of Labor Statistics, Anthony Balderrama, CareerBuilder.com, Figures rounded for simplicity. |
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What are you doing to save $1MM? If you earn a six figure salary at your job then you would get there a little quicker but how are things in the department of saving $1MM. I know several people with six-figure salaries who have had to rethink their plans and devise a new strategy in light of the stock market uncertainty and economic turmoil over the last few years. A business partner of mine came up with seven questions that one should ask himself to prompt putting an action plan in place to achieve that $1MM savings.
- Do you love or absolutely adore what you are doing for income right now?
- Do you really look forward to Monday mornings?
- Are you living a life that you feel will inspire your children, if you have or ever will have kids?
- Are you perfectly OK with doing the same thing you are currently doing for money in 20 – 30 years?
- Are you perfectly OK with asking for permission or needing “authorization” to take time off to take your kids to the doctor or perhaps attend a relatives wedding?
- Do you believe that your company has as much loyalty to you as you do to them?
- Are you OK with spending more time with framed pictures of your family on your desk than the real thing?
If your answers to these questions make you feel the slightest bit uncomfortable then it is time to act now. It is never too late to change directions if your “why” is big enough. Map out your PLAN B to save that $1MM and aggressively pursue it as if your life depended upon it. The reality is one can live on less than $1MM in savings during retirement but why take the chance if you have time on your side. In fact, just go ask anyone who retired in the last few years after a 20-30 year career if they wished they had earned and saved more money.
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