How Much Will You Have If You Invest $1,000 a Month? – Technologist

“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”

It’s a quote often attributed to Albert Einstein. There’s no definitive proof he actually said it. But it makes sense it would come from a genius. It’s that powerful.

To illustrate compound interest with our investment growth calculator, we’ve created an example where you save and invest $1,000 a month (or $12,000 a year). How much money can you realistically earn at that savings rate, given the amount of time you’ll be able to sustain it?

Our free calculator can help you see how much your savings and investments can grow over time. Just enter your details and see your financial goals come into view.

How Much You’ll Make Investing $1,000 a Month for a Decade

document.addEventListener(‘DOMContentLoaded’, function () {

var defaultContributionFrequency = “monthly”;

var selectElement = document.getElementById(‘ig_contribution-frequency’);
selectElement.value = defaultContributionFrequency;

calculate();

var loanForm = document.getElementById(‘loan-form’);
var inputs = loanForm.querySelectorAll(‘input, select’);

inputs.forEach(function (input) {
input.addEventListener(‘keyup’, calculate);
input.addEventListener(‘change’, calculate);
});

// Add toggle functionality
var toggleLink = document.getElementById(‘toggle-results-link’);
var resultsSection = document.getElementById(‘results-section’);

toggleLink.addEventListener(‘click’, function(event) {
event.preventDefault();
if (resultsSection.style.display === ‘none’) {
resultsSection.style.display = ‘block’;
toggleLink.innerText=”Hide results by year”;
} else {
resultsSection.style.display = ‘none’;
toggleLink.innerText=”Show results by year”;
}
});
});

var ctx = document.getElementById(‘chart’).getContext(‘2d’);
var myChart = new Chart(ctx);

function calculate(selectedFieldEvent) {
clark_calc_init_amount_field(selectedFieldEvent);

var beginning = clark_calc_convertToNumber(document.getElementById(‘ig_beginning’).value);
var contribution = clark_calc_convertToNumber(document.getElementById(‘ig_contribution’).value);
var years = parseInt(document.getElementById(‘ig_years’).value);
var rate = parseFloat(document.getElementById(‘ig_rate’).value);
var compounding = document.getElementById(‘ig_compounding’).value;
var contributionFrequency = document.getElementById(‘ig_contribution-frequency’).value;

// Update the dynamic labels
document.getElementById(‘investment-balance-label’).innerText=”Investment Balance in ” + years + ‘ Years’;
document.getElementById(‘investment-growth-label’).innerText=”Investment Growth over ” + years + ‘ Years’;

var labels = [];
var beginningData = [];
var contributedData = [];
var growthData = [];
var data = [];
var futureValue = beginning;
var totalContributed = 0;

var ANNUAL_GROWTH_RATE = rate / 100;
var MONTHLY_GROWTH_RATE = ANNUAL_GROWTH_RATE / 12;

if (compounding === ‘monthly’) {
var growthRate = MONTHLY_GROWTH_RATE;

for (var i = 1; i <= years * 12; i++) {

var growthAmount = futureValue * growthRate;

if (contributionFrequency == 'monthly') {
futureValue = futureValue + contribution + growthAmount;
totalContributed += contribution;
} else if (contributionFrequency == 'annual') {
if (i % 12 == 0) {
futureValue = futureValue + contribution + growthAmount;
totalContributed += contribution;
} else {
futureValue = futureValue + growthAmount;
}
} else {
console.log('ERROR: contributionFrequency is not monthly or annual');
alert('system error.'); return;
}

if (i % 12 == 0) {
beginningData.push(beginning);
contributedData.push(totalContributed);
growthData.push((futureValue – totalContributed – beginning));
data.push(futureValue);
labels.push(i / 12);
}
}
} else {
var growthRate = ANNUAL_GROWTH_RATE;

if (contributionFrequency == 'monthly') {

for (var i = 1; i <= years * 12; i++) {

var growthAmount = 0;

if (i % 12 == 0) {
growthAmount = (futureValue * growthRate) – (contribution * 12 / 2) * (growthRate);
futureValue = futureValue + contribution + growthAmount;
} else {
futureValue = futureValue + contribution;
}

totalContributed += contribution;

if (i % 12 == 0) {
beginningData.push(beginning);
contributedData.push(totalContributed);
growthData.push((futureValue – totalContributed – beginning));
data.push(futureValue);
labels.push(i / 12);
}

}

} else {
for (var i = 1; i <= years; i++) {

var growthAmount = futureValue * growthRate;
futureValue = futureValue + contribution + growthAmount;
totalContributed += contribution;

beginningData.push(beginning);
contributedData.push(totalContributed);
growthData.push((futureValue – totalContributed – beginning));
data.push(futureValue);
labels.push(i);
}
}
}

var futureValueElement = document.getElementById('future-value-result');

if (!isNaN(futureValue)) {
futureValueElement.innerHTML = clarkCalculators_formatMoneyWhole(futureValue);
}

document.getElementById('growth-result').innerHTML = clarkCalculators_formatMoneyWhole(futureValue – totalContributed – beginning);
document.getElementById('total-contributions').innerHTML = clarkCalculators_formatMoneyWhole(totalContributed + beginning);
document.getElementById('beginning-balance').innerHTML = clarkCalculators_formatMoneyWhole(beginning);

document.getElementById('contribution-amt-label').innerHTML = contributionFrequency === 'monthly' ? 'Monthly Investment Contributions' : 'Annual Investment Contributions';
document.getElementById('contribution-amt').innerHTML = clarkCalculators_formatMoneyWhole(totalContributed);

// Update the details table
var detailsTableBody = document.getElementById('details-table').getElementsByTagName('tbody')[0];
detailsTableBody.innerHTML = ''; // Clear existing rows

for (var i = 0; i < labels.length; i++) {
var row = detailsTableBody.insertRow(-1);

row.insertCell(0).innerHTML = labels[i];
row.insertCell(1).innerHTML = clarkCalculators_formatMoneyWhole(beginningData[i]);
row.insertCell(2).innerHTML = clarkCalculators_formatMoneyWhole(contributedData[i]);
row.insertCell(3).innerHTML = clarkCalculators_formatMoneyWhole(growthData[i]);
row.insertCell(4).innerHTML = clarkCalculators_formatMoneyWhole(data[i]);
}

// Update the chart
myChart.destroy();
myChart = new Chart(ctx, {
type: 'bar',
data: {
labels: labels,
datasets: [
{
label: 'Current Balance',
data: beginningData,
backgroundColor: 'yellow',
borderColor: 'rgba(54, 162, 235, 1)',
borderWidth: 1,
hoverBackgroundColor: 'rgba(54, 162, 235, 0.8)',
hoverBorderColor: 'rgba(54, 162, 235, 1)',
hoverBorderWidth: 2,
hoverOffset: 4,
stack: 'stack1',
},

{
label: 'Investment Contributions',
data: contributedData,
backgroundColor: 'rgba(54, 162, 235, 0.5)',
borderColor: 'rgba(54, 162, 235, 1)',
borderWidth: 1,
hoverBackgroundColor: 'rgba(54, 162, 235, 0.8)',
hoverBorderColor: 'rgba(54, 162, 235, 1)',
hoverBorderWidth: 2,
hoverOffset: 4,
stack: 'stack1',
},
{
label: 'Growth',
data: growthData,
backgroundColor: 'rgba(255, 99, 132, 0.5)',
borderColor: 'rgba(255, 99, 132, 1)',
borderWidth: 1,
hoverBackgroundColor: 'rgba(255, 99, 132, 0.8)',
hoverBorderColor: 'rgba(255, 99, 132, 1)',
hoverBorderWidth: 2,
hoverOffset: 4,
stack: 'stack1',
},
],
},
options: {
scales: {
yAxes: [
{
ticks: {
beginAtZero: true,
callback: function (value, index, values) {
return clarkCalculators_formatMoneyWhole(value);
},
},
stacked: true,
},
],
xAxes: [
{
stacked: true,
},
],
},
legend: {
display: true,
position: 'bottom',
},
tooltips: {
mode: 'index',
intersect: false,
callbacks: {
label: function (tooltipItem, data) {

var label = data.datasets[tooltipItem.datasetIndex].label || '';

if (label) {
label += ': ';
}
label += clarkCalculators_formatMoneyWhole(tooltipItem.yLabel);
return label;
},
},
},
},
});
}

Note: This calculator is completely interactive! Enter your numbers to see how long it will take to reach your savings goals.

By historic standards, an annual return of 7% is modest. Especially if you’re putting almost all of the money into the stock market in a total stock market or S&P 500 fund. But that’s what we’re assuming for this example.

At $1,000 a month for 10 years, assuming a starting balance of $100,000, you’ll get to $374,051. That includes $120,000 in monthly contributions and $154,051 in investment growth.

Again, with your $1,000 a month investment, you can nearly quadruple your initial savings in a decade with a fairly modest annual return.

Final Thoughts

Perhaps you’ve already saved $1 million or perhaps you’ve only saved $1,000. Either way, setting aside money from every paycheck toward your retirement via dollar cost averaging is Clark’s preferred way to invest.

Use our investment growth calculator yourself to see just how powerful compound interest will be for you over the long term. Or, if you want to get nerdy, use our savings table by years chart to understand what your account balance will be at different monthly savings amounts, over various numbers of years.

The post How Much Will You Have If You Invest $1,000 a Month? appeared first on Clark Howard.