Investment Calculator
The magic of compound growth
Invested money earns returns; those returns earn their own returns; and over decades, the math gets wild. $500/month invested at 7% from age 25 to 65 becomes roughly $1.2 million. Delay the start to age 35 and that same $500/month produces only $570,000 — less than half, despite only contributing a third less.
Two lessons: starting early matters more than starting with a lot, and volatility-in-any-single-year matters much less than average-return-over-decades. The chart above shows your projected balance year by year so you can see exactly when the compounding curve starts bending sharply upward (usually around year 15).
Frequently asked questions
How does compound interest actually work?
Your earnings earn earnings. $10,000 at 7% grows to $10,700 after year 1, but year 2 grows on the new $10,700 base, not the original $10,000. Over 30 years, that same $10,000 becomes ~$76,000 without adding a single dollar. The longer the horizon, the more the curve bends upward — this is why starting early beats contributing more later.
What's the Rule of 72?
Divide 72 by your annual return to estimate how many years your money takes to double. At 6%, money doubles every 12 years; at 9%, every 8 years. It's a quick mental-math shortcut; this calculator's actual compound math is more precise.
Should I invest in index funds or individual stocks?
Decades of data show that most individual investors — and most professional fund managers — underperform low-cost broad-market index funds over 20+ year horizons. Unless you have a specific reason to pick stocks, a total-market or S&P 500 index fund with a sub-0.10% expense ratio is almost always the right default.
What return rate should I assume for planning?
Long-term US stock market returns average around 10% nominal / 7% real (after inflation). For conservative planning, use 6–7% nominal; for optimistic, 8–10%. Bond-heavy portfolios should assume 3–5%. Over any single decade, actual returns can deviate wildly — use ranges, not point estimates.
How often should I rebalance?
Annually is standard and sufficient. Rebalancing too often triggers unnecessary taxes in taxable accounts and barely moves returns. In tax-advantaged accounts (401k, IRA), you can rebalance freely. Many people just rebalance on their birthday to keep a consistent schedule.
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