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

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Introduction: 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.

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

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

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

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

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

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)...

$1,039,796!

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

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 IRS.gov for changes.

Step 8: 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!]

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    50 Discussions

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    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.

    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

    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.

    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