Investment Calculator 2024
Calculate your investment returns with compound interest. See how your portfolio grows over time with different contribution strategies, return rates, and time horizons.
Investment Details
S&P 500 historical average: ~10%
Advanced Options
Typical salary increases: 2-4%
Index funds typically: 0.03-0.20%
Understanding Investment Growth
The Power of Time
Starting early is the most powerful factor in investment growth. Even small amounts invested in your 20s can outperform larger amounts invested in your 40s due to compound interest.
Consistency Matters
Regular contributions through dollar-cost averaging can reduce risk and improve long-term returns by buying more shares when prices are low and fewer when prices are high.
Investment Strategies
Asset Allocation by Age
20s-30s (Aggressive)
- • 80-90% Stocks
- • 10-20% Bonds
- • Focus on growth
- • High risk tolerance
40s-50s (Moderate)
- • 60-70% Stocks
- • 30-40% Bonds
- • Balanced approach
- • Moderate risk
60s+ (Conservative)
- • 40-50% Stocks
- • 50-60% Bonds
- • Capital preservation
- • Lower risk
Common Investment Vehicles
Tax-Advantaged Accounts
401(k)
Employer-sponsored, high contribution limits, potential matching
IRA (Traditional/Roth)
Individual accounts with tax benefits, more investment options
HSA
Triple tax advantage, can be used for retirement after 65
Investment Options
Index Funds
Low fees, broad diversification, tracks market performance
ETFs
Similar to index funds, more trading flexibility
Target-Date Funds
Automatically adjusts allocation as you age
Maximizing Returns
Key Principles
- Start Early: Time is your greatest asset in investing
- Minimize Fees: High fees can reduce returns by 1-2% annually
- Diversify: Don't put all eggs in one basket
- Stay Consistent: Regular contributions regardless of market conditions
- Rebalance: Maintain your target asset allocation
- Think Long-term: Avoid emotional decisions based on short-term volatility
Historical Market Returns
S&P 500
Average annual return since 1926 (including dividends)
Bonds
Long-term government bond average return
Inflation
Average inflation rate over the long term
Past performance does not guarantee future results. These are historical averages and actual returns vary significantly year to year.
Frequently Asked Questions
What is compound interest and how does it work?
Compound interest is earning returns on both your initial investment and previously earned returns. Over time, this creates exponential growth - your money makes money, which then makes more money.
What's a realistic expected return for investments?
Historically, the S&P 500 has averaged about 10% annual returns over long periods. However, conservative estimates often use 7-8% to account for inflation and market volatility. Diversified portfolios may see 6-9% returns.
Should I invest a lump sum or dollar-cost average?
Lump sum investing often outperforms dollar-cost averaging mathematically, but DCA reduces timing risk and can be easier psychologically. DCA is great for regular contributions from income.
How does investment frequency affect returns?
More frequent contributions (monthly vs. annually) can slightly improve returns due to more frequent compounding, but the difference is usually small compared to the total amount invested and time horizon.
What factors affect investment returns?
Key factors include asset allocation (stocks vs. bonds), fees/expense ratios, time horizon, contribution frequency, market timing, and economic conditions. Diversification and low fees are crucial for long-term success.