Investment Return Calculator
Calculate your investment returns with compound interest and regular contributions. See how your portfolio grows over time with inflation-adjusted results.
Investment Return Calculator
Project your investment growth over time
Investment Details
📚 Learn About Investment Returns
📈 Power of Compound Interest
Compound interest means earning returns on your returns. Over time, this creates exponential growth. The longer you invest, the more powerful compounding becomes.
Example: $10,000 at 8% for 30 years = $100,627 (10x growth from compounding).
📊 Historical Market Returns
- S&P 500 (stocks): ~10% average annual return (1926-2023)
- Bonds: ~5-6% average annual return
- 60/40 Portfolio: ~8% average annual return
- Inflation: ~3% average (reduces real returns)
💰 Regular Contributions Impact
Adding regular monthly contributions dramatically increases your final balance. Dollar-cost averaging also reduces risk by buying at different price points.
Example: $10k initial + $500/month for 30 years at 8% = $745,000+ total.
⏰ Time in Market vs Timing
Studies show that time in the market beats timing the market. Missing just the 10 best days over 20 years can cut returns in half. Stay invested long-term.
Key: Start early, invest consistently, don't panic sell during downturns.
⚖️ Risk vs Return
- High Risk/Return: Individual stocks, crypto (volatile)
- Medium Risk/Return: Stock index funds, REITs
- Low Risk/Return: Bonds, CDs, savings accounts
- Diversification: Mix assets to balance risk/return
🎯 Investment Strategies
- Max out tax-advantaged accounts first (401k, IRA, HSA)
- Use low-cost index funds (0.03-0.20% expense ratios)
- Diversify across asset classes and geographies
- Rebalance annually to maintain target allocation
- Avoid emotional decisions during market volatility
- Consider target-date funds for simplicity
How to Use This Investment Calculator
Enter Initial Investment
Input your starting investment amount and expected annual return rate (7-10% for stocks is typical).
Add Regular Contributions
Enter monthly or annual contribution amounts and investment time horizon in years.
Review Growth Projection
See total portfolio value, investment earnings, and inflation-adjusted returns over time.
Frequently Asked Questions
What is a realistic investment return rate?
Historical data shows the S&P 500 has averaged about 10% annual returns since 1926, but this includes high volatility. A conservative estimate for long-term stock investing is 7-8% after inflation. Bonds typically return 4-6%, while a balanced 60/40 stock/bond portfolio averages around 8%. Your actual returns will vary based on asset allocation, fees, and market conditions. It's wise to use conservative estimates (6-7%) when planning to avoid overestimating future wealth.
How does compound interest work?
Compound interest means you earn returns on both your original investment and on previously earned returns. For example, if you invest $1,000 at 10% annual return, you'll have $1,100 after year 1. In year 2, you earn 10% on $1,100 (not just the original $1,000), giving you $1,210. Over time, this compounding effect creates exponential growth. The longer you invest, the more powerful compounding becomes - this is why starting early is so important.
Should I invest a lump sum or make regular contributions?
Both strategies work well. Lump sum investing historically performs better (since markets trend upward), but requires having a large amount to invest. Regular contributions (dollar-cost averaging) reduce risk by spreading purchases over time, buying more shares when prices are low and fewer when high. For most people, regular monthly contributions from each paycheck is more practical and builds the discipline of consistent investing. If you have a lump sum, consider investing it over 6-12 months to balance timing risk.
How do fees impact my investment returns?
Fees have a massive impact over time due to compounding. A 1% annual fee might seem small, but over 30 years it can reduce your final balance by 25% or more. For example, $100,000 invested at 8% for 30 years grows to $1,006,000. With a 1% fee (7% net return), it only grows to $761,000 - a $245,000 difference! Choose low-cost index funds (0.03-0.20% expense ratios) over actively managed funds (1-2% fees). Every 0.1% in fees matters significantly.