How to Turn $200 into $1 Million
Updated: Sep 5, 2019
If you can make $200 each month, you can turn it into $1 million by investing in passive income assets. It takes time and effort but you can join the new millionaire club!
Most of us can find a way to make an extra $200 per month. We have an extensive list of money making ideas on the website - passiveincomemonthlyplan.com to generate passive income. In addition, you can cut $200 per month from your living expenses (trade your daily Starbucks for $1 million - your call).
I suggest you follow the passive income monthly plan to invest in 60 stocks and funds that pay monthly dividends. The dividends will help to grow your account over time and eventually provide the monthly income to achieve financial independence. This is a simple plan requiring minimum effort as you basically set it up and let it work each month.
Here is an overview for how it works:
Let's use the following assumptions to calculate the power of using monthly dividend stocks to grow a $1 million portfolio starting with only $200.
You will be investing in a portfolio of 60 monthly dividend stocks with an average annual yield of 15% which equates to a monthly interest of 1.25%. You will be adding $200 per month which is $50 per week. Let's be real as you can easily use side hustles, cash back rewards, get paid online and other activities to make $200 per month.
The monthly dividend stocks will pay dividends each month that will be reinvested into more shares allocated across 60 stocks in the portfolio. It is really this simple!
How long to reach $1 million?
In month 333 (27.6 years), you will have $1,010,373 in your account. This account will be earning $12,500 per month in passive income from dividend distributions. The $200 per month adds up to a total of $66,600 during the 333 months. WOW - you will be earning $150,000 per year in passive income that is more than you actually paid in over 333 months!
This is proof that the passive monthly income plan works over time. Yes, we did not consider taxes on dividends but there will be none if you do this within an IRA or 401K. If you use Robin Hood or WeBull , there are no trading commissions. However, we did not include the price appreciation of the stocks or any dividend increases either - both can shorten the time horizon.
You can shorten the time to $1 million by starting with a larger account or increasing the amount invested each month. If you start with $25,000 and add $400 per month ($100 per week), you can reach $1 million in 20 years.
Investing can get emotional, and it doesn’t help that you can see how you’re doing throughout the day by checking a stock ticker or turning on the news. By reinvesting each month, you are dollar-cost averaging the prices in the market.
But no one can be certain which way the financial markets are going to move. The best strategy, even when the market seems to be tanking, is to keep a level head and stay the course, Warren Buffett says.
“I don’t pay any attention to what economists say, frankly,” he said in 2016. “If you look at the whole history of [economists], they don’t make a lot of money buying and selling stocks, but people who buy and sell stocks listen to them. I have a little trouble with that.”
Now, you have the knowledge to turn $200 into a $1 million dollar portfolio and achieve financial independence. You next step is to sign up for a Robin Hood or WeBull account with $5. Then, signup for passive income opportunities to increase your monthly investment in your stock account.
Sign up for the Monthly Income Dividend Stocks - list of 400 stocks for monthly income