Investment Calculator
See how compound interest, regular contributions and time work together to build wealth over the long term.
Investment parameters
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Used for the inflation-adjusted value
Applied to growth only, not contributions
Frequently asked questions
Common questions about investing and using this calculator.
- How does compound interest work in investing?
- Compound interest is when you earn returns not just on your original investment, but also on all the returns you've accumulated over time. For example, if you invest $1,000 at 7% annual return, after one year you have $1,070. In year two, you earn 7% on the full $1,070, not just the original $1,000. This compounding effect accelerates your wealth building over time.
- What are realistic investment returns to expect?
- Historically, the S&P 500 has averaged about 10% annual returns over long periods, but this includes high volatility. A diversified portfolio might reasonably expect 6-8% annually over 20+ years. Conservative investments like bonds typically return 2-5%. Remember, past performance doesn't guarantee future results, and all investments carry risk.
- Is it better to invest monthly or in lump sums?
- Dollar-cost averaging (investing monthly) helps reduce the impact of market volatility and makes investing more manageable for most people. However, if you have a lump sum available, statistically it's often better to invest it immediately rather than waiting, since markets tend to go up over time. The best approach depends on your risk tolerance and cash flow.
- How does inflation affect my investments?
- Inflation reduces the purchasing power of your money over time. If inflation is 3% annually, something that costs $100 today will cost $103 next year. Your investments need to earn more than the inflation rate to maintain real purchasing power. This is why keeping all money in low-yield savings accounts can actually lose value over time.
- How do taxes affect investment returns?
- Taxes can significantly impact your returns. In taxable accounts, you pay capital gains tax when you sell investments for a profit (0%, 15%, or 20% for long-term gains). However, tax-advantaged accounts like 401(k)s and IRAs can help you defer or avoid these taxes. Always consider the tax implications of your investment strategy.
- How do I determine my risk tolerance?
- Risk tolerance depends on your age, financial goals, time horizon, and emotional comfort with volatility. Generally, younger investors can take more risk since they have time to recover from market downturns. Consider: How would you feel if your investments dropped 20% in one year? Can you afford to lose money? How soon do you need the funds?
By the numbers
What the data says
- July 2025
14%
US adults who own cryptocurrency
Source: Gallup - 2022 survey
$192,900
Median net worth of US families
The mean is about $1.06 million, pulled up by the wealthiest households
Source: Federal Reserve, Survey of Consumer Finances - Year-end 2024
$38,176
Median 401(k) balance among Vanguard plan participants
The average is $148,153, skewed by large accounts
Source: Vanguard, How America Saves 2025
National figures from the sources shown, as of the period on each card. They are context, not a forecast or advice for your situation.
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