What'S Your Billionaire Age - Middle School Article Of The Week Worksheet (Page 2 of 5) in pdf

Article of the Week

Vale Middle School –– What’s Your Billionaire Age?

Notes on my thoughts,

interest compounded annually. This means, if you start saving when you're

reactions and questions as I

fresh out of college and never touch the money, you could be a billionaire when

read:

you're 208!

If you invested in a more lucrative vehicle, like the stock market, you can

become a billionaire much quicker. Looking at the returns of the Dow Jones

over the past 40 years, there is an average return (CAGR) of 6.68% per year. If

these returns are similar for the coming years, then the teacher who puts away

10% of his or her salary per month could become a billionaire in just 145 years.

If you only wanted to become a millionaire, it would take you between 46 and 47

years in a 5% savings account and around 39 years if you followed the 6.68%

returns of the Dow.

High Earners

It seems nearly impossible to become a billionaire making the salary of the

average American teacher, but that's not really a surprise. How about if you're

in a higher salary range, like a surgeon or another specialized doctor? An

average anesthesiologist in the U.S. makes $211,750, according to the BLS,

and if that anesthesiologist was able to put away 10% of his or her earnings

every year into our savings account it would take around 160 years to become a

billionaire.

And if that anesthesiologist put their savings into an index that tracked the Dow,

it would still take more than a lifetime at 124 years. With that kind of salary it

seems like you just can't get there on hard work alone.

To give you more perspective, it would take a postal worker (mean salary

$48,940) around 188-189 years to become a billionaire using a savings

account, and 146-147 years investing in the market. It would take a lawyer

(mean salary $129,020) 131-132 years to make a billion in the markets, and

168-169 to make a billion in a savings account. So, when you think of it,

whether you're a lawyer, a teacher, a postal worker or a surgeon, the great

equalizer is that you'll never be a billionaire.

Out of Reach?

So, who can become a billionaire? How much would you have to have on hand

every year to invest and be a billionaire at a time where you could still spend it?

If you could put away $1 million a year, you're still looking at about 80 years of

saving or 64-65 years of investing before the big payoff. Even actors and

athletes who can make millions a year, rarely have the staying power to make it

every year for 80 years.

So, sorry to come to such a heartbreaking conclusion, but it's hard for anyone to

become a billionaire using traditional methods. To see a billion dollars during

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