How investment growth is modeled
An investment grows from contributions plus returns on everything already invested — compounding, applied to markets. Enter an initial amount, a monthly contribution and an expected annual return, and this calculator compounds the balance monthly: each month the balance grows by the return, then your contribution lands. The year-by-year table shows the moment growth starts out-contributing your deposits — for long horizons, usually somewhere in the second decade.
Choosing a realistic return
Long-run US stock market returns have averaged roughly 10% a year before inflation (about 7% after). Bonds and balanced portfolios average less, with smaller swings. A single "expected return" smooths all of that into one number — reasonable for planning, dangerous as a promise. If your plan only works at 12%, it is not a plan; test 6–7% as well and see if it still works.
The three habits that drive the result
- Start. The lump sum and early contributions compound for the entire horizon — they are the hardest-working dollars you will ever invest.
- Automate. A monthly contribution you do not have to remember survives bad news cycles, which is when contributions buy the most.
- Stay. The growth column in the table is back-loaded: most of the money arrives in the final years. Leaving early forfeits the steepest part of the curve.
What this calculator ignores
Taxes (which depend on account type — 401(k), IRA, taxable), fund fees (a 1% annual fee quietly consumes roughly a fifth of a 30-year outcome — worth modeling by lowering your expected return by the fee), and inflation. To see results in today's purchasing power, subtract expected inflation (~3%) from your return before entering it.
Worked example
Invest $10,000 up front plus $300 a month at 8% for 20 years. You contribute $82,000 in total and finish with about $225,974 — growth supplied roughly $143,974, far more than everything you put in. That crossover, where the market out-earns your deposits, is the signature of a long enough horizon.
How to use this calculator
- Enter any amount you can invest today (zero is a fine start).
- Enter a monthly contribution you can automate and sustain.
- Enter an expected return — be honest, not hopeful (see the guidance above).
- Set the years until the goal.
- Compare the “growth share” stat across horizons to see why time is the main ingredient.
Turn the result into a goal
Working backward works too: fix the target (say, $500,000 in 25 years), set the return, and raise the monthly contribution until the future value hits your target. That is the contribution your goal requires at that return — a concrete number you can budget around today.