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Refering to this question: Can saving investing 15% of your incoming start 25 likely make you a millionaire

In France the highest rate I can find is about 2%, with special conditions, while the post is talking about 6% in America.

My salary per year is about 50K. 35K in France is already a lot of money, considering we have health care and taxes; our salaries are weak compared to the US.

Knowing this, a person living in France can't be millionnaire saving only on salary. Even 40% will take so many years and it's so much! Or maybe I'm wrong?

Valentin Silvestre
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I get the sense that this is a "the world is unfair; there's no way I can succeed" question, so let's back up a few steps.

Income is the starting point to all of this. That could be a job (or jobs), or running your own business.

From there, you can do four things with your income:

  • Spend it
  • Save it
  • Give it
  • Invest it

Obviously Spend and Give do not provide a monetary return - they give a return in other ways, such as quality of life, helping others, etc.

Save gives you reserves for future expenses, but it does not provide growth.

So that just leaves Invest. You seem to be focused on stock market investments, which you are right, take a very long time to grow, although you can get returns of up to 12% depending on how much volatility you're willing to absorb.

But there are other ways to invest. You can invest in yourself by getting a degree or other training to improve your income. You can invest by starting a business, which can dramatically increase your income (in fact, this is the most common path to "millionaire" in the US, and probably in other free markets). You can invest by growing your own existing business. You can invest in someone else's business. You can invest in real estate, that can provide both value appreciation and rental income.

So yes, "investment" is a key aspect of wealth building, but it is not limited to just stock market investment.

You can also look at reducing expenses in order to have more money to invest.

Also keep in mind that investment with higher returns come with higher risk (both in terms of volatility and risk of complete loss), and that borrowing money to invest is almost always unwise, since the interest paid directly reduces the return without reducing the risk.

D Stanley
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You're ignoring inflation. Even if we assume the ECB sticks to its 2% inflation target, and your salary only rises in line with inflation, you will be saving considerably more in forty years' time than you are today. In fact, an interest rate of 2% and an inflation rate of 2% make the sums exceptionally easy. You need to save €25,000 per year in 2057 euros to be a millionaire by 2057, which is €11,322 in 2017 euros. Challenging, but achievable. Of course, you'll only be a millionaire in 2057 euros, which will be worth less than half as much as a euro is worth right now.

Mike Scott
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If your take-home salary after taxes etc is 35K / year, and you say you will be able to save at most 40% of that, you will need to find something that pays 2.75% to reach one million in 40 years*.

However, these numbers can chance dramatically depending on your specific circumstances. If you're just starting your career, 40 years of saving is not impossible. If you're in the middle or nearing the end, you will have dramatically less time to achieve your goals.

*40% of 35000 is 14000 saved per year, at an interest of 2.75% compounded annually, you will reach 1000000 after roughly 40 years.

MPF
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