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A middle-income family in Albania cannot save more than 2,000 euros a year. According to the Income and Living Level Survey in Albania, the average monthly income per person in Albania in 2018 was ALL 26,144.
An Albanian family consists of 3.7 members on average, which means that the average monthly income for a family is 96,736 ALL. Whereas the monthly expenditures of a family in the country, including expenses for food, clothing, education, entertainment, lodging and health, are ALL 75,935 according to the Household Budget Survey.
Taking into account the disposable income and expenses that an average Albanian family has, Monitor has calculated that the potential savings over the course of a year is not more than ALL 249,500, or about EUR 2,000.
But how long would it take for this family to become millionaires?
If every year this family would save some money (the 2000 euros left over each year after deducting the expenses), according to the time value of money formula, where we assume an average annual interest rate of 1.5% and take everything else unchanged and constant, it would achieve its goal only after nearly 1 century and 43 years.
The time value of money helps us calculate the value of an asset at a specific future time by assuming a certain interest rate. In this case, an average interest rate is obtained between the interest on the treasury bills, considered as an investment in risk-free securities and the interest on deposits.
If we were not to consider the time value of money, that is, if the 2000 euro had the same present value in the future, a family would need an average of 492 years or about 5 centuries.
Where is made the $ 1 million faster?
One million dollars is made faster in Luxembourg, Switzerland, and Iceland, where it takes an average of 16 years, according to estimates by The Economist.
Next is the United States with about 17 years, the Netherlands and Denmark with 19 years respectively.
It takes about 20 years to make $ 1 million in Austria and Belgium.
In the German state, $ 1 million can be made for 21 years, while in France and England it will take about 23 years. In Italy, on average, it will take 27 years and Greece for 38 years.
More time is needed to make the first million in East countries. In the Baltic countries, it takes about 41 years.
Among the European Union member states, Romania and Bulgaria require more time to make a million dollars. In Romania, it takes approximately 75 years, while in Bulgaria 1 century and 26 years.
In the last place is Armenia, were compared to a year ago an individual would need 2 centuries and 39 years from 2 centuries and 15 years to make the first million.