- The SpaceX IPO has made Elon Musk the world’s first trillionaire
- His stake in SpaceX has been valued at $866 billion
- Investing your way to £1 trillion is a stretch for the rest of us, but a million or even £100,000 could be well within reach
Sarah Coles, head of personal finance at AJ Bell, comments:
“Who wants to be a trillionaire? With Elon Musk hitting trillionaire status this week, you might be thinking about how you might spend £1 trillion, or wondering how long it could take for you to amass that number of zeros. The bad news is that realistically trillionaire status is probably out of reach.
“If you aimed for a trillion pounds and you were starting from scratch, you could put away £500 a month and, with growth at 5% a year and contributions rising 2% a year, it would take around 316 years. That’s quite a commitment, and not just from you. It relies on future generations sticking with the plan.
“But the good news is that becoming a millionaire isn’t impossible and can be achieved by patient investors willing to stay the course. It’s possible to realise a life-changing investment goal if you’re patient and invest for the long-term.
“If you invested £500 with 5% growth a year, after 40 years you could have invested your way to more than £1 million. You can still get there investing smaller sums if £500 a month is a bit punchy. Investing just £200 a month, rising 2% with inflation each year could see someone become a millionaire after 56 years.
“If you use pensions, you’ll get the added boost of tax relief, and within both pensions and Stocks and Shares ISAs, you’ll be protected from the tax on growth.
“If these kinds of figures feel out of reach, then you can still make a major difference by getting started with what you have, and revisiting it as you go along. Regular investment will build over time and deliver a valuable nest egg when you need it most. We may all want to shoot for the moon with our finances, but getting started as soon as possible with whatever works for you is the best way to build a resilient future. If you were to invest just £50 a month (rising 2% a year with inflation), and get 5% growth a year, within 25 years you’d have a nest egg of more than £35,000. If you were to boost that to £100 a month, with the same growth rate, you could build over £100,000 within 30 years.”
