# The First Million is the Hardest

It's true that it's easier for the rich to get richer. That first million is by far the toughest to make. But once you're there, it gets much easier to make the next million.

When you already have money working for you, each percent of return adds more to your worth. Earning 10% on \$10,000 gives you \$1,000. Making 10% on \$1,000,000 gives you \$100,000.

Let’s look at what it takes to accumulate your first million. Assume you regularly invest a monthly amount at a given return. Using the power of compounding, the table below shows you how many years it will take you to reach your first million. We'll assume you're starting from zero. Already have some savings? Then see our Million Dollar Savings Calculator to calculate exactly how long it will take to become a millionaire in your specific situation.

You might wonder why I chose \$1,375 as the last monthly contribution. That number happens to be the maximum amount an individual can contribute to their 401k in 2010, divided by 12 months.

As we've already mentioned, after you reach your first million it takes less time to make your second. When you start from \$1 million, you can take advantage of the effect of compounding on that first \$1 million.

If you consistently put away as much as you can afford, it is possible to have \$2 million in 26 years if you contribute the maximum to your 401(k) and achieve a 10% return. Even better, some companies will match some of your contribution, helping you reach your million-dollar goal even faster.

The taxman even wants to help.  He'll give you a break when you save in tax deferred accounts like 401(k)s and IRAs. If you are in the 25% marginal tax bracket and you contribute \$200, your out of pocket cost is only \$150. Now you have a little more money to contribute to help you become a millionaire even sooner.

The most difficult part is getting started. Once you begin, it becomes easier. So, what are you waiting for? Sign up today to have that monthly allotment taken out of your paycheck. Then increase it ever so slightly every six months until you reach the maximum contribution level. Before you know it, you will be well along your way to your first million.