Here's How Much Money You Could Have if You Invested $1,000 a Month for 20 Years (2024)

Investing money in a brokerage account is a smart financial move, but many people don't realize just how powerful investing is as a wealth-building tool. In fact, buying assets that provide you with reasonable returns is one of the keys to achieving financial independence for the vast majority of people.

To understand just why and how investing can be helpful, let's take a look at what happens if you invest $1,000 a month for a period of 20 years.

Here's what a $1,000 monthly investment could do for you

Investing $1,000 a month for two decades is undoubtedly going to help your money to grow, but the specific amount you'll end up with varies depending on the returns you earn.

For many people, it's reasonable to expect a 10% average annual return. That's what the (a financial index of around 500 of the largest U.S. companies) has consistently produced over time, so if you don't know how to pick stocks and don't want to try to figure it out, you can just put your money in a fund that mirrors its performance.

If you earn this 10% average annual return over a full two decades while putting in $1,000 per month during that entire time, you could end up with a nest egg of $687,306.72.

Now, you may be thinking that $1,000 a month for 20 years is a lot of money -- and you're right. But it's nowhere near $687,306.72. In fact, the actual value of your contributions alone would be $240,000, so you could end up with about $447,307 more than the amount you put in.

The returns you earn, and compound growth, account for all that extra money. When you invest, you ideally earn a profit on that investment in most years. The gains you make can be reinvested.

So, for example, if you invested $1,200 the first year and made a $120 profit, you'd have $1,320 invested the next year. So you'd now be earning returns on $1,320 instead of $1,200. The returns you get keep growing your balance, so next year you ideally earn even more.

How to find $1,000 a month to invest

Investing $1,000 a month may seem like a big task, as it's a total of $12,000 per year. But the average full-time worker earned $59,540 in the last quarter of 2022. So, investing $12,000 a year would mean putting away about 20% of your annual income if you earn around the average salary.

That's a lot of money, but it's not impossible -- especially if you keep your fixed expenses low. You also have to remember that you can get tax breaks for your savings and your employer might match the contributions you are making. So you don't necessarily have to invest that entire $1,000 a month all by yourself.

Say your employer offers a 401(k) and matches 50% of your contributions to it, up to 6% of your salary. You could earn an annual employer match of $3,572.40 if you earn the average annual salary, assuming you contributed at least that much to your 401(k). So, you would personally only have to contribute $8,427.60 per year to end up with $12,000 in your retirement account.

Now, let's assume you're in the 22% tax bracket, which is where you'd be as a single tax filer with the average income. If you invest $8,427.60 a year, you'd save $1,854.07 on your taxes. So your contributions would already decrease your actual take-home income by $6,573.53. That's about 11% of your annual income which should be very doable. The table below shows what this would look like.

Your contribution$8,427.60
Employer match$3,572.40 (maximum match based on your salary)
Total contribution$12,000
Tax deduction$1,854.07 (22% of $8,427.60)
Actual cost of contribution after tax savings$6,573.53

Data source: Author's calculations.

As you can see, if you invest only a little more than 10% of your income, you can be on track to a nest egg of well over half-a-million dollars. So, get started today. Sign up for your company's 401(k) if you have access to one, and ask your employer to make automatic contributions for you from your paycheck. If you don't have a 401(k), arrange to have money taken out of your checking account each month and sent to an IRA. You'll have to contribute a little more without the employer match, but if you can even get close to a $12,000 annual contribution, you should be well on your way to a secure future.

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Here's How Much Money You Could Have if You Invested $1,000 a Month for 20 Years (2024)

FAQs

Here's How Much Money You Could Have if You Invested $1,000 a Month for 20 Years? ›

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.

How much is $1000 worth in 20 years? ›

As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
Discount RatePresent ValueFuture Value
6%$1,000$3,207.14
7%$1,000$3,869.68
8%$1,000$4,660.96
9%$1,000$5,604.41
25 more rows

How much will I have if I invest 200 a month for 20 years? ›

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.

How much money will I have if I invest 500 a month for 30 years? ›

What happens when you invest $500 a month
Rate of return10 years30 years
4%$72,000$336,500
6%$79,000$474,300
8%$86,900$679,700
10%$95,600$987,000
Nov 15, 2023

How much money will I have 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. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.

What happens if you invest $1000 a month for 20 years? ›

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.

How much money can I make if I invest $1000 a month? ›

Investing $1,000 a month for 30 years, with an average annual return of 7%, can yield a total of approximately $1.22 million. This calculation shows how regular, long-term investments can grow significantly over time, thanks to compound interest.

How much do I need to invest monthly to be a millionaire in 20 years? ›

For example, it takes $1,400 per month to reach $1 million in 20 years. However if you can find 30 years to save, it only takes $475 per month to reach the same goal. This isn't easy, but finding the extra time may be easier than finding an extra $12,000 per year.

How much is $100 a month for 20 years? ›

When you invest, there's no guaranteed rate of return.
Time investedTotal money investedEstimated total balance
10 years$12,000$17,802.12
20 years$24,000$58,052.42
30 years$36,000$149,057.67
Oct 15, 2023

How much will I have if I invest $1000 a month for 30 years? ›

If you start by contributing $1,000 a month to a retirement account at age 30 or younger, your savings could be worth more than $1 million by the time you retire.

How to turn $1000 into $10 000? ›

6 Ways to Turn $1000 into $10000
  1. Invest in Real Estate.
  2. Invest in Stocks and ETFs.
  3. Get Out of Debt Now.
  4. Start an Online Business.
  5. Retail Arbitrage.
  6. Invest in Yourself.
Jan 23, 2024

How much money do I need to invest to become a millionaire in 5 years? ›

Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.

How much do I need to invest a month to be a millionaire in 5 years? ›

Saving a million dollars in five years requires an aggressive savings plan. Suppose you're starting from scratch and have no savings. You'd need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate.

What is the best investment right now? ›

11 best investments right now
  • Money market funds.
  • Mutual funds.
  • Index Funds.
  • Exchange-traded funds.
  • Stocks.
  • Alternative investments.
  • Cryptocurrencies.
  • Real estate.
Mar 19, 2024

How much should I invest a month to become a millionaire in 10 years? ›

Now, let's consider how our calculations change if the time horizon is 10 years. If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.

What happens if you save $100 dollars a month for 40 years? ›

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.

How much will $1000 be in 10 years? ›

As you will see, the future value of $1,000 over 10 years can range from $1,218.99 to $13,785.85.
Discount RatePresent ValueFuture Value
2%$1,000$1,218.99
3%$1,000$1,343.92
4%$1,000$1,480.24
5%$1,000$1,628.89
25 more rows

How much will a dollar be worth in 20 years? ›

Real growth rates
One time saving $1 (taxable account)Every year saving $1 (taxable account)
After # yearsNominal valueNominal value
203.5641.02
255.0062.94
307.0793.87
7 more rows

What will $10 000 be worth in 30 years? ›

If you invest $10,000 and make an 8% annual return, you'll have $100,627 after 30 years. By also investing $500 per month over that timeframe, your ending balance would be $780,326.

What will the investment be worth in 20 years if $1000 is invested so that it grows at the rate of 10 per year? ›

Compounding. Compounding is the impact of the time value of money (e.g., interest rate) over multiple periods into the future, where the interest is added to the original amount. For example, if you have $1,000 and invest it at 10% per year for 20 years, its value after 20 years is $6,727.

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