Money tool
What could steady investing actually add up to?
The same money left in a savings account and put to work look nothing alike after twenty years. Put your own numbers in and watch the gap open.
- Last reviewed
- Method
- Compound growth on a lump sum and contributions
- Your figures
- Stay in this browser
An assumption, not a promise. Real returns vary every year and can be negative.
Most people can raise what they invest as pay rises. Leave at 0 to keep it flat.
What this assumes
- The return you enter, earned steadily every year.
- Contributions paid in monthly and never withdrawn.
- No fees, no tax, and no adjustment for inflation.
Real markets do none of that. Some years are negative — this is an illustration, not a forecast.
After 20 years
$168,357
Worth about $104,173 in today's money, after 2.5% inflation
$72,000
You paid in
$98,700
Growth
$75,698
In savings
That is $95,002 more than the same payments would reach in a savings account at 0.5%, assuming the 8% return holds on average.
How it grows
- Invested$170,700
- Paid in$72,000
- Savings 0.5%$75,698
Year by year
What has gone in, and what it is worth, at the end of each year.
| Year | Paid in | Value |
|---|---|---|
| 1 | $3,600 | $3,730 |
| 2 | $7,200 | $7,759 |
| 3 | $10,800 | $12,110 |
| 4 | $14,400 | $16,809 |
| 5 | $18,000 | $21,883 |
Two small changes
- $50 more a month adds $28,450.
- Five more years adds $101,998, without paying in another penny each month.
A guide, not a quote. A steady return is a convenience, not a forecast. Real markets fall as well as rise, and this is before charges, tax, and what inflation will have done to the value of the total.
How well do you really know money? Play Number CheckEducational estimate only, not financial advice.
How this works
Steady contributions, compounded
value = initial × (1 + r)^n + monthly × [((1 + r)^n − 1) / r]
- r — the annual return divided by 12
- n — the number of months invested
- Each contribution compounds only for the months remaining after it is made
Where the money actually comes from
Put 5,000 a month away for 20 years at an assumed 10% and the result is 3,591,296. Of that, 1,200,000 is money you contributed and 2,391,296 is growth. Roughly two-thirds of the final figure was never earned by you at all.
The same 5,000 a month in a savings account paying 0.5% comes to 1,261,629 over the same period. That difference — around 2.3 million on identical contributions — is the entire argument for investing rather than only saving, and it is also the entire risk, because the growth is assumed rather than guaranteed. The savings rate the page compares against varies by region, so the figure on your screen will match the rate shown beside it.
Why the curve bends late
Look at the year-by-year figures and the first decade looks almost linear. In year five the pot is 382,806 against 300,000 contributed — growth of only 82,806. By year fifteen it is 1,992,220 against 900,000. By year twenty, 3,591,296 against 1,200,000.
The pot roughly doubles in the final five years of the run, and the contributions during that time are the same as any other five years. What changed is the size of the balance that the return applies to. Compounding does almost nothing visible early and nearly all of its work at the end, which is precisely why stopping early is so costly and why starting early matters more than the amount.
What the number cannot know
A single assumed return is a straight line through something that is not straight.
- Real returns arrive unevenly. A market that averages 10% delivers it through years of +25% and −15%, and the order those arrive in changes the outcome, especially near the end.
- Fees compound too. A 1% annual charge does not cost 1% — over twenty years it quietly removes a significant share of the growth above.
- Tax depends entirely on the account and the country, and is not modelled here.
- Inflation means the final figure buys less than the same number does today.
Questions people ask
Is 10% a reasonable assumption?
It is roughly the long-run nominal average of large developed equity markets before inflation, and it is not a figure to plan a specific decade around. After inflation the long-run number is closer to 6–7%, and any individual twenty-year stretch can land well either side of it. Try a lower figure and see whether the plan still works — if it only works at 10%, it is fragile.
Why does the calculator show a savings comparison?
Because the gap between the two is the only honest way to see what the assumed return is actually claiming. If the difference looks implausibly large, that is a signal to question the return you entered rather than to celebrate.
Lump sum now or spread over time?
Mathematically, investing a lump sum sooner wins more often than not, simply because the money spends longer compounding. Spreading it out reduces the chance of putting everything in immediately before a fall, which is a real psychological benefit even where it costs a little expected return. Both are defensible; doing neither because you cannot decide is not.
What happens if I stop contributing halfway?
Less than you might fear, and more than is comfortable. The existing balance keeps compounding, so the pot still grows — but you lose both the later contributions and all the growth those contributions would have produced. Run it with the shorter contribution period and the same total years to see the two effects separately.
Method and figures last reviewed . Every worked example here is produced by the same calculation the page runs — enter the same inputs above and the numbers will match.