Investment Calculator

How to use this investment growth calculator

Here's what you'll need to enter to get started:

Initial investment: Enter how much you plan to invest to start.

Years of investment growth: Enter the number of years you plan to stay invested. For example, if you're investing for a goal that is six years away, you'd enter 6 in this field. Time is one of the single biggest factors in investment growth — if you invest $50 a month for 30 years, you'll end up with around $60,000 at a 7% average annual return. Only $18,000 of that is your own contributions; the remaining $42,000 comes from investment growth. If you only have ten years, that calculus gets completely reversed — to accumulate $60,000, you'd need to contribute $42,000 and investment growth would account for $18,000.

Estimated rate of return: The calculator uses a 6% average annual investment return — the amount your investment will grow each year — as a default.

Compound frequency: This is how often the money you earn from your investment return is added to your balance. Generally, for investments like stocks or ETFs, you'd use daily compounding.

Amount of recurring investments: If you're planning to invest on a regular basis, enter the amount you plan to invest going forward. Also select whether you plan to make those investments monthly or annually.

What's considered a "good" investment return?

Whenever we talk about "good" or typical investment returns, we need a big blinking disclaimer: They vary, especially on a short-term basis, based on a number of factors. The economy, various industry and company pressures, interest rates and inflation can all push returns up or down and introduce general volatility.

But the biggest factor in your own investment return will be what specifically is in your portfolio. You can't expect your portfolio's return to match the average stock market return if half of your investments are bonds.

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That said, it helps to have some general guidelines as you use this calculator:

Our suggestion? Run the numbers a few different ways, using a few different investment returns. For a conservative estimate of how much your investment will grow, knock the above returns down a couple of points. For an aggressive estimate, you could add a couple of points. The reality will likely fall somewhere in the middle.

How do you minimize risk while still earning a return?

By definition, investing comes with some risk. However, one of the best ways to minimize that investment risk is to ensure your portfolio is diversified.

Diversification is a financial strategy that spreads your money across many different investments. For example, for optimal diversification, you wouldn't just invest in one stock — you'd build a portfolio of stocks from different industries and regions, and you'd allocate some of your portfolio to other investments, such as bonds.

What this does is act like a seesaw — ideally, when one of your investments is doing poorly, others are doing well to balance that out.