What if I invest $100 a month for 30 years?
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100.
You plan to invest $100 per month for 30 years and expect a 6% return. In this case, you would contribute $36,000 over your investment timeline. At the end of the term, your bond portfolio would be worth $97,451. With that, your portfolio would earn more than $61,000 in returns during your 30 years of contributions.
If you invest $100 a month for this many years... | ...this is how much you'll end up with. |
---|---|
15 | $41,939.68 |
20 | $75,603.00 |
25 | $129,818.12 |
30 | $217,132.11 |
Becoming a Millionaire by Investing $100 Per Month
According to Ramsey's tweet, investing $100 per month for 40 years gives you an account value of $1,176,000.
If you were to invest $200 per month over the course of the next 30 years, that would equate to a total investment of $72,000. That's significant, but it's through the effects of compounding that would get your portfolio to a more than $1 million valuation.
Your Retirement Savings If You Save $100 a Month in a 401(k)
If you're age 25 and have 40 years to save until retirement, depositing $100 a month into a savings account earning the current average U.S. interest rate of 0.42% APY would get you to just $52,367 in retirement savings — not great.
To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.
Consider two hypothetical investors. Investor A starts investing $100 a month at 25. By age 65, they would have a retirement balance greater than $640,000, assuming annual returns of 10%, which is the average return of the S&P 500 over the long term.
- High-yield savings accounts. Compared to traditional savings accounts, these accounts offer higher interest rates, which can help your money grow faster.
- Certificates of deposit (CDs). ...
- Treasury bonds.
Investing as little as $200 a month can, if you do it consistently and invest wisely, turn into more than $150,000 in as soon as 20 years. If you keep contributing the same amount for another 20 years while generating the same average annual return on your investments, you could have more than $1.2 million.
Is 55 too late to start saving for retirement?
If you didn't make saving for retirement a priority early in life, it's not too late to catch up. At age 50, you can start making extra contributions to your tax-sheltered retirement accounts (called catch-up contributions).
It is never too late to start saving money you will use in retirement. However, the older you get, the more constraints, like wanting to retire, or required minimum distributions (RMDs), will limit your options. The good news is, many people have much more time than they think.
Rate of return | 10 years | 30 years |
---|---|---|
4% | $72,000 | $336,500 |
6% | $79,000 | $474,300 |
8% | $86,900 | $679,700 |
10% | $95,600 | $987,000 |
Over the years, that money can really add up: If you kept that money in a retirement account over 30 years and earned that average 6% return, for example, your $10,000 would grow to more than $57,000. In reality, investment returns will vary year to year and even day to day.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
Investing $1,000 a month for 20 years would leave you with around $687,306. The specific amount you end up with depends on your returns -- the S&P 500 has averaged 10% returns over the last 50 years. The more you invest (and the earlier), the more you can take advantage of compound growth.
Compound Interest Calculator - $1,000 Per Month for 30 Years Equals $1,468,150.42.
This chart shows that a monthly contribution of $100 will compound more if you start saving earlier, giving the money more time to grow. If you save $100 a month for 18 years, your ending balance could be $35,400. If you save $100 a month for 9 years, your ending balance could be about $13,900.
If you're investing $200 per month while earning a 10% average annual return, you'd have around $395,000 after 30 years.
Living off interest involves relying on what's known as passive income. This implies that your assets generate enough returns to cover your monthly income needs without the need for additional work or income sources. The ideal scenario is to use the interest and returns while preserving the core principal.
How to become a TSP millionaire?
TSP contributions and investing should be top of mind when you begin your federal career. An employee who earns 50,000 per year and contributes 2,500 dollars with a 2,500-dollar match from the government can reach the TSP millionaire dollar mark in 25-30 years by investing aggressively.
- Start saving early.
- Avoid unnecessary spending and debt.
- Save 15% or more of every paycheck.
- Increase the money that you earn.
- Resist the desire to spend more as you make more money.
- Work with a financial professional with the expertise and experience to keep you on track.
Top the amount with 401(k) savings, living on $3,000 a month after taxes is possible for a retiree. For those who only have social security benefits to rely on, there are many places where they can retire on their checks both in the USA and around the world.
Time invested | Total money invested | Estimated total balance |
---|---|---|
10 years | $12,000 | $17,802.12 |
20 years | $24,000 | $58,052.42 |
30 years | $36,000 | $149,057.67 |
Now, a new survey by International Living listed 13 global destinations where entertainment, housing, healthcare, and food come with a much lower price tag than in the U.S., so retirees can live comfortably on $1,500 per month. Mexico is the undisputed winner, with three cities on the list — the most of any country.
References
- https://www.aol.com/many-americans-retire-million-dollars-140019727.html
- https://www.investopedia.com/financial-edge/0709/so-you-wanna-be-a-millionaire-how-long-will-it-take.aspx
- https://www.fool.com/the-ascent/buying-stocks/articles/heres-how-much-money-you-could-have-if-you-invested-1000-a-month-for-20-years/
- https://www.approachfp.com/retire-on-500k/
- https://smartasset.com/retirement/how-to-save-a-million-dollars-in-30-years
- https://finance.yahoo.com/news/realistically-save-1-million-dollars-140021333.html
- https://www.wsj.com/buyside/personal-finance/how-much-do-i-need-to-retire-f3275fa7
- https://www.businessinsider.com/personal-finance/how-much-should-i-save-each-month
- https://finance.yahoo.com/news/high-net-worth-retirement-planning-155252223.html
- https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more
- https://finance.yahoo.com/news/got-200-per-month-3-120000627.html
- https://finance.yahoo.com/news/living-off-interest-1-million-164122384.html
- https://www.gobankingrates.com/money/making-money/best-ways-to-double-5000-dollars/
- https://finance.yahoo.com/news/much-savings-70-140006145.html
- https://finance.yahoo.com/news/genius-ways-1-000-month-105500970.html
- https://tools.carboncollective.co/future-value/1000-in-20-years/
- https://www.fool.com/the-ascent/buying-stocks/articles/heres-what-happens-when-you-invest-500-a-month/
- https://www.nasdaq.com/articles/want-%241-million-in-retirement-invest-%24300000-in-these-3-stocks-and-wait-a-decade.
- https://www.cuemath.com/questions/what-is-the-future-value-of-10000-on-deposit-for-5-years-at-6-simple-interest/
- https://finance.yahoo.com/news/turn-100-000-investment-1-161238030.html
- https://www.fedweek.com/tsp/tsp-millionaire-it-takes-effort-but-you-can-do-it/
- https://believeinabudget.com/10-ways-make-extra-money-500-month/
- https://www.fool.com/investing/2018/08/15/how-to-invest-500-a-month-and-become-a-millionaire.aspx
- https://www.cuemath.com/questions/if-you-invest-10000-today-at-10-interest-how-much-will-you-have-in-10-years/
- https://money.usnews.com/money/retirement/articles/how-to-turn-500k-into-passive-retirement-income
- https://smartasset.com/investing/investing-100-a-month-how-much-will-you-make
- https://www.ramseysolutions.com/retirement/how-to-become-a-millionaire
- https://lyonswealth.com/blog-details/how-to-invest-500k
- https://www.nysaves.org/home/basics-of-529s/saving-early-matters.html
- https://finance.yahoo.com/news/200k-invest-turn-1-million-130019052.html
- https://en.as.com/latest_news/how-long-does-1-million-in-retirement-savings-last-in-each-us-state-n/
- https://foolwealth.com/insights/are-you-in-the-top-3-of-retirees
- https://medium.com/@Levente22/7-ideas-to-make-1-000-2-500-per-month-in-passive-income-18da68d470e2
- https://finance.yahoo.com/news/income-considered-middle-class-2024-160007340.html
- https://www.pewresearch.org/2023/12/04/the-assets-households-own-and-the-debts-they-carry/
- https://finance.yahoo.com/news/much-retirement-saved-100-month-130108345.html
- https://smartasset.com/retirement/how-much-to-put-in-a-roth-ira-per-month
- https://finance.yahoo.com/news/40-awesome-places-retire-3-135503265.html
- https://money.usnews.com/money/personal-finance/articles/what-is-the-average-american-net-worth-by-age
- https://www.fool.com/the-ascent/buying-stocks/articles/starting-to-invest-in-2024-heres-how-much-youll-need-to-become-a-millionaire-in-30-years/
- https://smartasset.com/investing/how-to-make-500-a-month-in-passive-income
- https://finance.yahoo.com/news/many-people-actually-1-million-110118151.html
- https://finance.yahoo.com/news/income-level-considered-rich-140003986.html
- https://www.investopedia.com/financial-advisor/how-much-save-to-become-millionaire/
- https://smartasset.com/investing/how-to-invest-500-dollars
- https://money.usnews.com/money/retirement/articles/what-is-a-good-monthly-retirement-income
- https://www.fool.com/retirement/how-much-do-i-need/
- https://www.sarwa.co/blog/invest-1000-per-month-5-years
- https://finance.yahoo.com/news/passive-income-7-ways-extra-130052593.html
- https://www.joshuakennon.com/1821745-households-in-the-united-states-have-investment-portfolios-worth-3000000-or-more/
- https://finance.yahoo.com/news/much-interest-earn-1-million-150000229.html
- https://www.fool.com/investing/2024/01/28/heres-how-investing-200-per-month-can-create-1-mil/
- https://www.empower.com/the-currency/life/average-net-worth-by-age
- https://finance.yahoo.com/news/retire-comfortably-65-1-million-130047104.html
- https://www.zacharyfruhling.com/seemegetrich/compound-interest-calculator-1000-per-month-for-30-years-equals-146815042
- https://www.nerdwallet.com/calculator/compound-interest-calculator
- https://www.bankrate.com/retirement/average-monthly-social-security-check/
- https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/how-much-should-i-save
- https://www.fool.com/the-ascent/buying-stocks/articles/i-can-only-afford-to-save-100-a-month-whats-the-smartest-thing-i-can-do-with-it/
- https://www.ssa.gov/benefits/retirement/planner/agereduction.html
- https://www.nasdaq.com/articles/4-ways-to-grow-%24100000-into-%241-million-for-retirement-savings-13
- https://www.empower.com/the-currency/money/can-you-retire-a-million-dollars
- https://www.nasdaq.com/articles/dave-ramsey:-invest-$100-a-month-to-become-a-millionaire-in-retirement
- https://www.gobankingrates.com/investing/strategy/investing-1000-dollars-every-month/
- https://www.investopedia.com/ask/answers/175.asp
- https://www.nasdaq.com/articles/4-ways-to-grow-$100000-into-$1-million-for-retirement-savings-16
- https://www.forbes.com/advisor/banking/savings/millionaire-calculator/
- https://finance.yahoo.com/news/invested-1000-p-global-decade-133005715.html
- https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/
- https://finance.yahoo.com/news/rich-heres-americans-think-considered-182847861.html
- https://money.usnews.com/money/retirement/articles/how-can-i-earn-100-200-or-500-per-month-in-guaranteed-income-in-retirement
- https://finance.yahoo.com/news/many-americans-retire-million-dollars-140019814.html
- https://www.bankrate.com/retirement/retirement-saving-tips-for-50s/
- https://www.unfcu.org/financial-wellness/50-30-20-rule/
- https://finance.yahoo.com/news/2-5-million-roth-ira-110000154.html
- https://www.wallstreetzen.com/blog/how-to-invest-200k/
- https://www.nasdaq.com/articles/how-can-you-tell-if-someone-is-a-millionaire
- https://www.investopedia.com/articles/investing/110615/investing-100-month-stocks-20-years.asp
- https://www.cnbc.com/2023/06/15/how-much-money-it-takes-to-be-considered-wealthy-in-major-us-cities.html
- https://www.nasdaq.com/articles/do-this-for-$4000-in-dividend-income-every-month
- https://refi.com/calculator/investment-returns-calculator/
- https://smartasset.com/investing/investing-200-a-month-how-much-will-you-make
- https://finance.yahoo.com/news/long-4-million-last-retirement-130042732.html
- https://www.forbes.com/advisor/retirement/how-much-to-save-for-retirement/
- https://www.forbes.com/sites/andrewrosen/2023/03/02/how-your-retirement-savings-compare-to-the-national-average/
- https://www.ramseysolutions.com/retirement/how-many-millionaires-in-us
- https://www.forbes.com/sites/pattieehsaei/2023/10/12/you-can-afford-to-invest-start-with-just-100-per-month/
- https://www.nasdaq.com/articles/got-%24500-to-invest-monthly-this-exchange-traded-fund-can-make-you-a-millionaire.
- https://lyonswealth.com/blog-details/how-much-money-do-i-need-to-invest-to-make-3000
- https://www.fool.com/the-ascent/buying-stocks/articles/will-investing-100-a-month-really-make-a-difference-in-your-net-worth/
- https://relayfi.com/blog/how-to-make-10k-per-month
- https://www.unbiased.com/discover/retirement/retire-on-900k
- https://www.cbsnews.com/news/wealth-1-percent-5-8-million-knight-frank-report/
- https://www.travelandleisure.com/best-cities-to-retire-worldwide-for-usd1500-a-month-8603792
- https://www.empower.com/the-currency/life/is-social-security-income-taxable
- https://www.gobankingrates.com/investing/stocks/how-to-make-500-a-month-in-dividends/
- https://www.bankrate.com/retirement/maximum-social-security-benefit/
- https://www.sofi.com/learn/content/what-is-a-good-monthly-retirement-income-for-a-couple/
- https://finance.yahoo.com/news/got-500-invest-stocks-put-110000748.html
- https://www.unbiased.com/discover/retirement/can-you-retire-on-300k
- https://www.nasdaq.com/articles/10-unique-ways-to-invest-$100-and-grow-it-to-$1000
- https://finance.yahoo.com/news/8-key-signs-ve-made-170047090.html
- https://www.experian.com/blogs/ask-experian/5-ways-to-invest-500/
- https://finance.yahoo.com/news/500-every-month-passive-income-130041730.html
- https://www.quora.com/Do-you-think-saving-2-000-a-month-for-1-person-is-good-enough-in-the-Bay-Area
- https://www.nasdaq.com/articles/want-%24300-in-super-safe-monthly-dividend-income-invest-%2432000-in-the-following-3-ultra