While becoming a millionaire might sound impossible to some, there are over 56 million millionaires around the world. And while some might come from family money, many made their fortunes on their own.
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The number is impressive for two reasons. First, now more than 1% of people in the world are millionaires. The number of millionaires grew by 7.4% in 2020 alone, during a pandemic.
Our Life Plan has looked into how long it takes to become a millionaire depending on where you live. Just how long do you need to work to retire with £1 million? And are some cities more likely to produce millionaires than others? Let’s look at the numbers.
Calculating what it takes to be a millionaire
Our Life Plan looked at many things to figure out how long somebody needs to work to earn a million. This included the cost of living in a specific city, average disposable income, and the average retirement age in the area. They gave people a little leeway too – they were allowed to eat out once per week and go on a holiday once a year while saving towards their £1 million goal.
Although not a perfect formula, the numbers do show the number of years somebody would have to save to retire with £1 million.
Where you should live to become a millionaire
Let’s face it – some cities are just more conducive to making you rich than others. According to the research, Bern in Switzerland takes the top spot. With an average wage of £49,764, the Swiss capital allows people to become millionaires in just under 30 years as long as they’re conscious savers.
Spot number two goes to Washington, D.C. , in the United States, where 30.02 years of savings are needed to make £1 million. Sydney, Australia and Luxemburg City also take top spots.
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How the UK fares
London comes in fifth place, with just over 40 years of work needed to be able to save £1 million. The average wage in London is the fifth highest of all the countries researched at £37,780, making it easier for Londoners to save their money post expenses.
Back in 2018, there were 3.6 million households in the UK with a net wealth of at least £1 million. Net wealth includes investments, pension savings, belongings and properties. Since then, the number has only grown, and a current study shows London now has more millionaires than New York.
Not all cities produce a lot of millionaires
People living in certain cities will never be able to become millionaires by just saving part of their income after expenses. A good example is residents of Riga, Latvia, where the average worker would have to save for 1,481 years to reach £ 1million. In second and third places are Lisbon (846 years) and Budapest (708 years).
Even the cities at the bottom of the top 10 list aren’t faring much better. In Prague, you would still need 201 years to save enough money to become a millionaire.
In cities like these, you can increase your chances by adding additional sources of income, starting a business or getting a second job.
According to Ian Wright, founder of Our Life Plan, “Just because your average salary is low does not mean this needs to be your only source of income. Since the pandemic, there’s been a rise in the number of people setting up their own ‘side hustles’ and diversifying their income streams.”
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