Investment Calculator

1. Enter a starting amount. This is your current portfolio balance or initial lump-sum investment. Enter 0 if you are starting from nothing with only monthly contributions.
2. Set your monthly contribution. This represents regular deposits: 401k payroll deductions, automatic transfers to a brokerage, or any recurring investment. Even $200-$300 per month makes a dramatic difference over 20-30 years due to compound growth.
3. Choose an annual return rate. The S&P 500 has averaged about 10% per year (7% after inflation) over the past 90 years. Use 7% for a reasonable baseline. Use 5-6% for conservative estimates or a balanced portfolio. Use 10% only for historical stress-testing.
4. Set the investment period. How many years until you plan to withdraw or need the money. Longer periods dramatically increase the final value through compounding.
5. Toggle inflation adjustment. The real (inflation-adjusted) future value shows what your projected balance would buy in today's dollars, assuming 3% annual inflation. This gives a more honest picture of long-term purchasing power.

The year-by-year table at the bottom shows how your balance, total invested, and total returns grow each year, letting you see exactly when compounding takes over from contributions as the main growth driver.

Investment growth combines the future value of an initial lump sum with the future value of regular contributions (an annuity). Both compound monthly at the annual rate divided by 12.

Future Value = FV(lump sum) + FV(contributions)

FV(lump sum) = P × (1 + r)^n
FV(contributions) = PMT × [(1 + r)^n - 1] / r

Where:
P   = Initial investment
PMT = Monthly contribution
r   = Monthly return rate (annual rate ÷ 12)
n   = Total months (years × 12)

The power of compounding over time: $10,000 invested at 8% annually with $500/month contributions:

By year 30, over 75% of the portfolio value came from compounding returns rather than contributions. This is why starting early matters more than investing larger amounts later.

The most impactful variable in long-term investing is time, not the rate of return or contribution amount. Here is a comparison of two investors both contributing $400/month at 8% annual return:

The early starter ends up with 2.4x the final balance of the late starter, despite contributing only $48,000 more. Ten extra years of compounding are worth more than years of larger contributions.

For most long-term investors, a simple index fund tracking the S&P 500 or total market is the appropriate vehicle. Expense ratios matter: a fund charging 0.03% (like Vanguard's VTSAX) vs. 1% annually leaves you with hundreds of thousands more over 30 years on the same contributions.