Introduction: How to Make $1,000,000+ by the Time You Are Retired ( Assuming You Are a Teen)

Picture of How to Make $1,000,000+ by the Time You Are Retired ( Assuming You Are a Teen)

An easy way to put your hard earned cash to work to earn you money.


Step 1: Get a Social Security Number.

Picture of Get a Social Security Number.

This is the official ID number you'll need before you can set up your get-rich investment.

Good news: Chances are your mom or dad already took care of this for you. (They have to enter your Social Security number on their tax return to claim you as a dependent.) All you need to do is find out what it is.

Hint: If you need to get a Social Security number, click here to get one.

Step 2: Head to the Bank and Open a Roth IRA

Picture of Head to the Bank and Open a Roth IRA

This special kind of IRA-- individual retirement account-- is your secret weapon. Unlike other kinds of savings and investments, the interest you earn might be completely tax free. That means you get to keep more of your money instead of handing it to Uncle Sam.

Hint: While there's no minimum age for setting up a Roth IRA, you might want to bring one of your folks along with you to the bank. They can help answer questions you might have with the paperwork

Step 3: Put in $10 a Week

Picture of Put in $10 a Week

It could be from chores around the house or an after-school job. The only trick is that you have to earn it. This is because the money that goes into a Roth IRA has to be taxable income.

Hint: You can claim your parents as your employer if they're paying you to do work around the house.

Step 4: Get a Folder and Find a Safe Place

Picture of Get a Folder and Find a Safe Place

Time for a little record keeping, just in case the tax man has any questions for you down the line. You'll need a safe place to keep copies of your records-- like the statements showing how much sweet moolah is piling up in your IRA.

Hint: If your folks have a safe deposit box, fire safe or other place with important documents, you could ask if you could keep your IRA stuff there.

Step 5: Think Long Term

Picture of Think Long Term

There's a reason why the R is IRA stands for retirement. This isn't a get-rich-quick scheme. You'll be earning money over years and years, so be prepared to wait a while before you get to play with your million bucks.

Hint: You can take money out of your Roth IRA to do things like help pay for college, but you will probably pay a penalty for it. If your ultimate goal is to save that $1 million, you're better off not touching it.

Step 6: Do the Math

Picture of Do the Math

Based on an "average rate of return" of 11.5 percent (the average amount investments like yours grew between 1970 and 2006) and a retirement age of 65, your $10 a week will grow into (drum roll, please)...


Hint: If you want to see a cool graph of how much money you can make, try this online IRA calculator.

Step 7: Up That $10

Picture of Up That $10

Once you get a better job and can swing a little more than $10 a week, up your contributions. The more money you put into your account earlier, the better. This is because it's got more time to sit and grow.

If you put in $20 instead of $10, from age 16 to age 65, you could earn more than $2 million!

Hint: The maximum contribution you can put in each year usually goes up. In 2007, it was $4,000. Keep an eye on for changes.

Step 8: When You Are Old and Retired Withdraw Your Hard Earned Money

Picture of When You Are Old and Retired Withdraw Your Hard Earned Money

Head over to the bank and make your withdrawal. Then, enjoy yourself. Maybe fix up your house, get a new denture cleaner [=, or anything else you can think of. Enjoy!]


hamimwangi (author)2015-01-14

Incredible tips..$1 milion is really big for me.. :)

ways to make money online as teenagers

adarshnarsaria (author)2013-07-14

Visit the link to get your part time job

Wolf Seril (author)2008-10-02

Too bad the economy is going to collapse soon and this will be worthless.

Scammah (author)Wolf Seril2008-10-04

It's comments like that that don't help the economy. Have some faith... otherwise just stuff your money in your mattress and hope for no fires.

tinker234 (author)Scammah2012-02-27

i agree think abut it reality is perception so we think something it will happen think walking same with others we have hit some rough spots but this a good way to try so don't worry about it

guitarmonk15 (author)Scammah2010-06-24

who's laughing now?

8bit (author)Scammah2008-12-20

Realism in thought leads to appropriate planning.

ksully994 (author)Scammah2008-10-26

i hear that

8bit (author)Wolf Seril2008-12-20

Yup. Time to learn trading.

lioneatr (author)8bit2009-07-11


dont be such a downer.

fegundez1 (author)2012-01-22

Unfortunately if you list your parents as your employer you do 2 things to them. first you kill their tax break for taking care of you, this is in the thousands yearly! also they will have to file tax info on you also take taxes out of your pay like social security disability etc. I commend you on the desire to have a retirement acct but you cant sink your own family to do it. The better way to do this type of thing is to start a business doing something you are interested in, think small to start, for instance you seem to have an interest in the financial world learn as much as you can and set up an internet advice column, blog etc aimed at young persons who have need of this charge nominally for your advice ans put that into your savings. Many universities have their classes online for free, you wont get college credit but you will get college knowledge. Another thing you can do is sell plants to those in your neighborhood, don't try the 10 a yard race mowing gig you will never get anywhere, help people get their homes looking nice, this requires work!! But it will pay well as you get better at it. Just remember to save!! Recycle, and keep learning.

iNate (author)2011-12-23

we need to fix that

kbawcutt (author)2011-05-22

This is a great instructable. Young people like me need to learn that if you save when you're young that compound interest practically works for you

lil jon168 (author)2009-03-15

if you are 12 (me) and u put 10 $ in the bank till ur 65 u will have over 200K

seamaas (author)lil jon1682010-09-16

did you change the average rate of return to 11.5?

bowmaster (author)2010-03-08

I'm 15 and I can put in up to $75 a week. How much money will I have when I'm 50?

seamaas (author)bowmaster2010-09-16


seamaas (author)2010-07-27

The maximum contribution you can put in 2010 is $5,000

seamaas (author)seamaas2010-09-16

it is $6,000 if you are 50

nerd12 (author)2010-05-08

why don't you post an instructable that shows you how to get the money easily to put in the account.

kachup (author)2009-12-22

the price you pay is that you wont enjoy your money much, at 65 the fun you can have is limited.

bowmaster (author)kachup2010-03-08

Keep in shape.

teslafan100 (author)2010-01-18


squarepants (author)2009-09-08

frankly id rather spend the money when im young- when im old i will probably just sleep all day,like i do on weekends. also, when i make my withdrawal ill probably get run over by a car on the way home from the bank cos ill be too slow with my zimmerframe to get out of the way and ill be like "waaaaaaaaaaaaahhhhhhh.....splat!" and so yeah.....uhhhhhhh......yep thats whatll happen

bowmaster (author)2009-06-17

I will use my money to buy a new body from a young, dead person. Then I will have my brain put in the body. Then I will start this process over again. I will keep repeating it so I live FOREVER!! MWAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!

lioneatr (author)bowmaster2009-07-11

lol u funny

bowmaster (author)lioneatr2009-07-15

I nose it.

coolcoolsunpower (author)2009-01-15

save now BEFORE the economy totally crashes

I think it just did... lol

Oops too late

ik lol but start now unntil it is soooooooooooooooooooooo bad

A good name (author)2009-02-22

Good idea for people in the USA, not for me unfortunately I'm in Canada :(

akagoldminer (author)2009-02-10

This would be a good idea if we actually had money to begin with which we don't. All we have is Federal Reserve Notes. Real money was confiscated by the Government during the 30's to 60's when money was made from gold or silver and thus worth someting of value. Read the articles on by Phillip Tilley and all wil be explained.

LinuxH4x0r (author)2008-10-02

Or just get an account in Iran with 15% interest (yes, I said 15)

ac1D (author)LinuxH4x0r2008-10-02

can we do this without leaving our house? lol

LinuxH4x0r (author)ac1D2008-10-03

No, not unless you give me 1/2 of it :P

ac1D (author)LinuxH4x0r2008-10-03

i give you 100000$ when ill be 65yo.

tradergordo (author)2008-10-03

Hey I like that you are encouraging people (particularly young people) to save. Yes, the power of compounding interest can be a wonderful thing! That said, people should have realistic expectations too, especially older people trying late in the game to save & invest. 11% annual returns is unrealistic in my opinion, particularly if you are investing when prices / peak earnings ratios are high. Still over 50 years you should get at least 7-8%. Next you should consider inflation. $1,000,000 50 years from now will probably be like $65,000 today. You can't retire on that alone. An average, normal sized house will probably cost over $3 million dollars at that time, a new car, $375,000. This is not an exaggeration. If you want to plan to retire in style - you are going to have to be much more aggressive than $10/week. And finally, don't assume the government won't back out of their promise not to tax ROTH withdrawals, if ROTHs even still exist in the future. Although they are probably more likely to get their money in other ways (including depreciating the currency to inflate away debt).

westfw (author)tradergordo2008-10-03
  • consider inflation
In principle, I think investments in stocks 'automatically' adjust for inflation. The "value" of a company (which is what you are investing in when you buy stocks) shouldn't change much just because the value of the underlying dollar changes. Acme Bread company, capable of baking 10k loaves of bread each day, is still going to have a value somewhat relative to the cost of a loaf of bread, regardless of whether that cost is "$0.20" or "$20.00"...
(Presumably, this is part of why stocks seem to do so well over the long term. All other things being exactly equal (which they never are, of course), a stock's value should always go up at the same rate as inflation.
tradergordo (author)westfw2008-10-03

I agree with you in principle, but in the real world, inflationary periods are very bad for real stock returns. And given the extremely elevated levels of debt and expected future deterioration of the government's balance sheet, a period of very high inflation is extremely likely over the next 30 years (but not over the next 5 in my opinion).

ggiihh1 (author)2008-10-02

well it's better than a 401k

westfw (author)ggiihh12008-10-02


ggiihh1 (author)westfw2008-10-02

With the 401k you put in the money before taxes and have to pay taxes on the deposits and interest when you withdraw it. With the Roth IRA you pay taxes before you deposit it and no tax on the withdrawal. So, 401k= tax on deposit & interest; Roth IRA = tax before deposits. You have to taxes on more money for the 401k. Furthermore, for teens being employed by parents, they most likely don't have to pay taxes.

westfw (author)ggiihh12008-10-03

Hmm. I don't know if it's that simple. If you invest pre-tax dollars in the 401k, you can (theoretically) invest MORE while leaving you with the same income (though not as a non-tax-paying teenager, I guess.) Part of the theory of retirement is that you contribute when you're making lots of money (and being highly taxed) and then withdraw at a low rate (paying less taxes) after you are retired. Furthermore, your better employers may contribute matching funds of some kind to a 401k. It's a complex issue, but I'll stand by my other statement that if you can just "save" the $10/week SOMEWHERE, the details of where you saved it aren't nearly so important. I WOULD encourage "youngsters" to learn more about investing in the stock market vs normal savings accounts. Even if it's only "no load index-based mutual funds are good."

fiftydotsix (author)2008-10-03

For those in the UK a similar method would to be investing your money in a tax free ISA. an ISA has a cap of £3000 a year so dont be putting in more than £70 a week :P. Also if you do chose to put you money in a ISA remeber to make sure that it is a transferable ISA eg you can move it between diffrent banks. Another tip would be to make go for an ISA that has notifcation requirements for withdrawing your money, they genraly have a higher rate of interest and help remove the temptation to spend any of it.

JakeTobak (author)2008-10-02

This year the maximum is $5,000 and it's going to go up $500 every year, unless something changes. You also need to make as much as you deposit. So if you only get $3,000 a year from chores or what ever, you can't put the full $5,000 into the roth IRA. Which isn't a problem if you don't have that much to put in, but if you're a parent opening one for your child you would need to, like you said, "hire" your kid.

westfw (author)2008-10-02

Well, the key is saving/investing that $10 per week. If you can do that, having the roth ira as opposed to some other form of investment is only mildly interesting. The chief advantage, that the income is not taxable, probably doesn't even come into play during your early years; you won't be paying taxes anyway. And as I get reminded occasionally, the goal is to maximize after-tax income, not minimize taxes.

You still have to pick where to invest your investments. It might be a good time to invest in some sort of index fund, since their current prices are depressed because of assorted panics. Or it might be a bad time to invest in any stocks, since the whole system is about to fall apart. :-) :-(
(You're not going to get an 11.5% average return in anything other than the stock market, though...)

Isn't there generally a "minimum initial investment" for such things?

When you DO become employed, it is somewhat likely that your employer will offer some sort of retirement benefits that are better than your Roth IRA. (eg 401k with matching funds); probably the most important thing to do from a retirement perspective is to pay attention to those retirement benefits, even when you're young and it doesn't seem to make any sense to be thinking about retirement.

ongissim (author)2008-10-02

Nice tips; I learned this in economics class. However, 1 million dollars probably won't be very much in 50 years.

snoyes (author)ongissim2008-10-02

It'll be an awful lot more than you'll get out of social security.

About This Instructable




More by ggiihh1:Adding FractionsDecimal To FractionMisc. Parts
Add instructable to: