The investment calculator below shows you how big your portfolio can grow after five, 10 or 20 years. It’s free to use. And it can help you plan how much you need to save to hit your retirement goals.
As you enter the variables, the calculator automatically updates. You’ll see the investment and interest compound each year. Also, below the results, you’ll find the variables explained, along with a core investing concept.
Investment Calculator Variables
For a better understanding of the calculator inputs, here’s a breakdown…
- Starting Amount: The beginning value of your investment
- Additional Contribution: The same amount you’ll add to your portfolio each time period
- Frequency: How often you make contributions and the interest compounds
- Rate of Return: Your expected annual rate of return
- Years to Grow: How long you’ll let the investment grow
Compound Interest Returns
It’s hard to fathom the power of compound interest. Albert Einstein is often attributed with the following quote…
Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.
In the short term, it’s hard to see compounding at work. But over the long run, it really adds up. That’s why our investment calculator is so useful. You can see that total interest returns grow by a larger amount each year.
To see another look at how this works, check out our dividend reinvestment calculator.
Saving and investing more today means you’ll earn even more interest down the road. This is one of the most important concepts in finance. Now that you have a better understanding, let’s look at some other useful ideas and resources.
How to Invest and Improve Portfolio Returns
As mentioned, increasing the amount you save and invest has a huge impact. On the saving money side, it’s fairly straightforward. The goal is to keep more of your earnings than you spend. And on the investing side, it’s a little more challenging.
Average investor returns barely keep up with inflation. Inflation has hovered around 2% in recent history. Although stocks and top investors have returned 8% plus annually. This big gap is largely due to a misunderstanding of how markets work.
That’s why Investment U has gathered some of the top minds in the investing world. To gain some of their insight, you can sign up for our free e-letter below. Our experts share a wide range of investing tips and ideas. You’ll find ideas ranging from the top penny stocks to tech stocks and so much more.
Whether you sign up for free or not, we hope our investment calculator comes in handy. Also, if you found it useful, please share it with your friends and family.