On... Million Dollar per Year

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Told my wife that we will have a million dollars in 10 - 15 years time. Her reaction was pretty muted. 

Whether it was disbelief or she was unimpressed, I'm sure she (and others) would be even more in disbelief if I told her I can earn a million per year. 

It doesn't matter how long you take to accumulate your first million. For our discussion, let's assume you have a CAGR of 10%. As soon as you accumulate your first million, it will take just another 7 years to get your next million. The table below shows the progression of your net worth over time. Using the rule of 72, you double your net worth roughly every 7 years (with 10% CAGR).





The chart above shows the increase of your net worth over time. You double your net worth every 7 years or to put it another way, one cycle of net worth doubling is 7 years. And the next cycle, you double your net worth again. Meaning, in 2 cycles (or 14 years), your net worth has increased from 1 million to 4 million. This also means in every cycle, you double your earnings. For example, in your first cycle, you earn 1 million, and in your second cycle, you earn 2 million... Etc. 

Therefore, in the first cycle, it takes 7 years to earn 1 million and in the second cycle, you only take 3.5 years. This time-to-earn-a-million will half every cycle. And if you live long enough, eventually, it will take you only 1 year to earn a million. Take a look at the chart below. 



Will  I ever earn a million a year? It's not in the plan but who knows - we will find out one day. 

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