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-- If you didn’t read the topic about Compounding Interest do so now. It will help explain how this is possible. Once you have read it one of the things that stands out is how much money goes towards paying off a loan at the beginning, but later on the majority of the payment goes towards your favor. This can also work for you towards retirement.
-- Now, you might be the person who invents a specific item everyone needs and earn an obnoxious amount of money. I know a guy who did this on the Internet and has so much cash he doesn’t even pay attention as he buys $50,000 cars because it is such a drop in the bucket. Pretty nice if you can do it. But for the rest of us who are struggling there is another plan, though it takes discipline. Lets say you find a place that pays 8% a year annually, that works out to .67% a month. If you add $225.00 a month to this for a year you will have $2,559.17, of which $101.23 will be interest you earned. Big whoopee you say. If you did this for five years you would have $20,705.70. Of that  $4505.70. Not much you may think, but notice the in the first year you made $101.23 a year. The next four (4505.70-101.23) you made $4404.47, or an average of $1101.12. Granted the majority of the money is your that you are depositing, but that is how things work.
-The thing is that on month 516, if you do this monthly, you will cross the $1,000,000.00 amount. The month 516 divided by 12 months is 43. So if you started this at the age of 18, at age 61 you would have a million dollars. The other thing is at this point the amount of interest being earned a month would be $6,712.41. It’s true. Work it out on a spreadsheet. Start with $0.00. Add 225.00. The first month there is no interest. The  result is $225.00. The second month multiply $225.00 by .067 (8%/12) and then add $225.00. You will have $451.50. Just keep doing this for 516 times and you will see.

This depends on you being able to come up with $225.00 a month. This can come from salary increase, cutting back expenses, side jobs, how ever, but this is how it works. And of course the more you save, the more you save and the interest starts to climb.

One last thing. There is something to be said for retiring like this. Even in an inflated world a million dollars is worth something. But as a CPA I once worked for pointed out your first investment should be in you. Perhaps you need to spend your funds on learning, meditating, things that help you develop as a person. So don’t harm your self to do this. But if you have habits that are not good for you, cut them out and aim the money towards this goal. Look and see if there is any amount you can do without spending, and simply keep the image of receiving about $6700 a month in interest to live on the rest of your life. Which is more important to you?