Becoming a Millionaire on $5 a Day

Becoming a Millionaire on $5 a Day

Becoming a millionaire might seem like a far-fetched achievement, even an impossibility. However, as unbelievable as it might seem, with as little as $5 per day, you can work your way up to millionaire status by the time you retire. You’ll just need a little bit of time. But not as much time as you might think.

The key lies in the distinction between saving (what most people do) and investing (what rich people do).

Saving vs. Investing for Retirement

While some people may use the term “saving” and “investing” interchangeably, the two are distinct.

With saving, you can readily use the money whenever you’d like and have a minimized risk of losing the money. On the other hand, investing comes with a much greater risk of losing the money.

But with that greater risk, there should also be a greater potential for reward. That is, investments have more potential for growth. That growth is key for unlocking millionaire status, at least when you don’t have a huge income.

Let’s compare saving and investing in greater detail now.

Saving for Retirement

According to a Bankrate survey, 52% of Americans feel that they have not accumulated enough to take them through their retirement years.

Simply put, people do not leave themselves much room for error. Or they anticipate relying on the government or some third party to pay for their retirement.

The only way to increase your chances of reaching millionaire status is to start saving more.

But didn’t I just mention how investing was the key to growth?

Well, yes, but the first step towards having money to invest is to save it. If you can’t save anything then you won’t have anything to invest. Or you’ll have to take out debt to do it, but then you’re opening up yourself to much larger risks.

Even if it’s only a few dollars a day, you can start to create a large nest egg for yourself by the time you reach retirement age.

All of that said, if you don’t invest those savings, you’ll almost invariably have to save way more than if you put the same money into investments.

That’s because savings are extremely vulnerable to inflation and, at least in today’s interest rate environment, earn close to nothing in interest.

So, if you need $1,000,000 in today’s dollars to retire, you’ll probably have to personally earn all $1,000,000 and then some if you only save (and don’t invest) for retirement. That’s an extraordinarily tall order.

In any event, if you cannot spare any income to save up, you should explore some side hustle options or some other way to boost your earnings. Conversely, you can look for ways to decrease your expenses, even if only slightly. Every dollar counts.

In a moment we’ll take a look at what happens when you invest those savings instead, starting with a mere $5 per day.

Investing for Retirement

It’s extremely challenging to grow your retirement nest egg with savings alone. However, by investing your retirement savings, you can grow them far more rapidly to become a millionaire.

You’ll need consistency and patience. You’ll have to give your invested money time to grow. Eventually, the money that the money earns will start earning its own money. This is a little something called compound interest.

Simply put, the earlier you begin, the better your chances of achieving more with less. And you might be shocked at just how much more that nest egg might be thanks to compound interest.

Understanding Compound Interest

Compound interest is when your money earns money, and then that earned money earns its own money, and so on. The money grows on itself.

For example:

Initial InvestmentYears to GrowAnnual Growth RateEnding Total
$10,000 207%$38,696.84
$10,000 307%$76,122.55

Notice how with every additional 10 years, the ending total nearly doubles. The growth is exponential.

This assumes you start with the same $10,000 with no annual additions! The annual growth rate is the same in every case – every year the existing pile grows by 7%. But look at how much more quickly the total grows as you add more time.

Compound Interest
*assumes no additional contributions

The example above is entirely thanks to compound interest.

Now that we’re equipped with the power of compound interest, let’s see how far we can take it.

How to Become a Millionaire on $5 per Day

Can you really become a millionaire with $5 invested per day?

If you were to save $5 per day, it would take you a little over 547 years to reach $1,000,000.

Good luck with that.

But if you invested the $5 per day into something that earned 7% in annual interest, it would only take 54 years to reach that same $1,000,000.

Admittedly, that’s still a long time, but we’re only talking about $5! That’s basically a cup of coffee each day.

What if you doubled it to $10 per day? Then it would only take you 44 years to reach $1,000,000, assuming a 7% annual return.

How about doubling it again to $20 per day? Now it only takes 34 years to reach $1,000,000.

As you can see, you can create huge results with comparatively little investment when you give your investments time to run.

But what if you wanted to retirement far more quickly? Maybe you want to retire in 10 years, not in over 30 years!

Well, you’ll definitely need to up your daily contributions in a big way. Your investments won’t have much time to compound, after all.

To retire in 10 years using an investment that returns 7% per year, you’d need to invest $186 per day.

That number might seem unobtainable, but if you can find a way to significantly reduce your expenses or boost your income, you can reach millionaire status far more quickly. It’s a trade off.

In any event, the power of compound interest is real. It’s an investor’s best friend, and rewards long term investors in huge ways.


Your age doesn’t matter; all you need to do is start now so you can give your investment the most time to grow.

Note that the figures above might fluctuate depending on the type of investment you choose, and there’s always a risk of an investment not panning out. This is where something like diversification can help to protect your initial investment, even if it might hold back some potential upside.

Also remember that if the rate of return increases, the time to $1 million decreases. However, as expected returns increase, often risk increases, too.

Whatever the case, investing consistently requires a lot of discipline. But, in the end, if you play your cards right, it will be well worth your time.

This website, and any communication stemming from it, while hopefully informative, should not be taken as financial or legal advice. Assume all links are affiliate links. I am an Amazon affiliate.

Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

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