Everyone should be a millionaire
Like everyone else, I have to assume that I need to take care of my own retirement. I only finished school 3 years ago, so I don't have a lot of money. However, by the time I retire, I'd like to have at least a million euros in my bank account. Bing! And I think you should too.
In the best case scenario, I assume a 5% annual interest rate. Given a million euros, that would translate to 50,000 euros a year in interests, or 4,166 euros a month. Given that inflation erodes the value of money, a euro today is worth more than a euro tomorrow. If we assume inflation will be 2.5% year over year, prices will double in 30 years. So by the time I retire, that 4,166 euros is the equivalent of 2,000 euros today. In other words, a million euros doesn't look like a crazy number to aim for.
In the worst case scenario, I assume a 1% annual interest rate on one million euros. In this scenario, I can't live on the interest rates and would need to eat slowly away from my one million euro bank account. Assuming that I withdraw the same 4,166 euros a month during my retirement, I'll burn through my one million euros in less than 25 years. Some people live longer than 25 years after they retire.
As said, I don't have a lot of money, but in both scenarios, it seems like a million euros is a good number to aim for. It is also an easy number to remember. The bad news is that saving a million euros is hard. How do you plan to get there?