Three Easy Lessons for Millennials to Retire as Millionaires

The message from many financial advisers is that to be successful, investing must be complicated. Sorting through hundreds of investments to come up with the “best” choices and then constantly tweaking your holdings to reflect every new stock that comes along is not only impractical, it also reinforces the myth that one needs to pay someone high fees to manage the process. The fact is that the more complicated your investing strategy and the more investments you accumulate; the harder it may be to monitor your portfolio and the more things that can go wrong.

According to a recent BNY Mellon survey, more than 20% of those under 30 said they received no financial guidance at work or during school. It is not a surprise that more than 50% of those surveyed admitted that they did not know how much they would need to save for retirement. Below is how we suggest getting started.

1.You don’t need to be wealthy to invest, but you need to invest to be wealthy

One of the biggest financial advantages out there is something anyone can access by opening a simple investment account. This is the mathematical magic of compound interest. Albert Einstein called it the eighth wonder of the world for good reason.

Start by opening a retirement account, such as an IRA, that can be set up by individuals. These aren’t just savings accounts; they can be used to actively invest. The taxes incurred by traditional IRA accounts on gains and dividends are deferred until retirement date when you withdraw. The below graph from US News and World Report, dated Oct. 19, 2015, shows just how powerful compounding can be.

The blue top line shows that if Susan, who is 25, invests $250 a month early in her career, she is well on her way to being a millionaire by age 65 if you assume a 7.5% return. The red line shows the savings growth, net of fees, which could cost as much as $150,000. The purple line shows that one would only have just over $100,000 if they put their money in a basic savings account.

2.When you start saving is more important than how much you save

Even with volatile swings in the market, investing when you’re young and for the long haul is more fruitful than letting your money sit in a savings account. In the chart below, Vanguard shows the power of saving early in your career.

$1 could grow to much more by retirement — but it depends on when you start investing

The chart above assumes an annual 4% return after inflation and shows how a $1 contribution will compound if you give it time to grow. For example, if you contribute $1 at age 20 it could be $5.84 by the time you’re 65.

3. Go with a simple, low-cost investing plan.

Robo-advisors are a new breed of low-cost automated investment platforms that use algorithms to manage portfolios efficiently and are offered online. Look for those that offer a balanced, diversified exposure with the ability to generate returns in all market cycles. Keeping fees to a minimum is especially important.

Chill out and worry about other things

You don’t need to check your account balance every day or constantly change your investment strategy based on the latest market rumor. If you save on a regular basis and invest in an appropriately diversified portfolio of stocks and bonds, you can put retirement worry aside and turn your attention to the other things in life, like how to spend your money when you retire.


Mark Landis helps lead Wavelength Capital Management, a U.S.-based independent alternative investment management firm. He is a frequent author of articles on markets and finance.

Twitter: @markblandis


Wavelength Capital Management, LLC (“Wavelength”) is an SEC-registered¹ investment adviser located in New York. Wavelength may only transact business in those states in which it is notice filed or qualifies for a corresponding exemption from such requirements. Wavelength’s website is limited to the dissemination of general information regarding its investment advisory services to United States residents residing in states where providing such information is not prohibited by applicable law.

Accordingly, the publication of Wavelength’s website on the Internet should not be construed as Wavelength’s solicitation to effect, or attempt to effect, transactions in securities or the rendering of personalized investment advice for compensation over the Internet.

Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this commentary is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in this report is derived from sources that Wavelength believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.

For information pertaining to the registration status of Wavelength, please view the United States Securities and Exchange Commission’s website A copy of Wavelength’s current written disclosure statement discussing Wavelength’s business operations, services and fees is available from Wavelength upon written request. Wavelength does not make any representations as to the accuracy, timeliness, suitability, completeness or relevance of any information prepared by any unaffiliated third party, whether linked to Wavelength’s website or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

¹ SEC registration does not indicate a certain level of skill or training.

Show your support

Clapping shows how much you appreciated Mark Landis’s story.