Finding extra money to put into a brokerage account and invest can be really challenging -- especially if you have pressing expenses to take care of today.
It may seem really intimidating to try to transfer a ton of money out of your checking account to a brokerage firm to buy stocks. But what if you don't have to invest a fortune? If you invest just $100 a month, will that contribution really make a big difference in your net worth in the end?
How $100 a month can help make you wealthy
Investing just $100 a month can actually do a whole lot to help you grow rich over time. In fact, the table below shows how much your $100 monthly investment could turn into over time, assuming you earn a 10% average annual return.
| If you invest $100 a month for this many years... | ...this is how much you'll end up with. |
|---|
| 5 | $8,058.73 |
| 10 | $21,037.40 |
| 15 | $41,939.68 |
| 20 | $75,603.00 |
| 25 | $129,818.12 |
| 30 | $217,132.11 |
Data source: Author's calculations
That's a substantial amount of money to end up with, especially given that the median 401(k) balance for individuals ages 65 or over is just $87,725. You could end up with well over double what the typical American has saved for retirement, just from your $100 a month investment alone.
How investing $100 a month helps your wealth grow
A $100 monthly investment doesn't seem like a lot, but when you put this money into the market, it earns returns. If you earn 10%, in a year, your $100 initial investment would be worth $110.00. Next year, you would earn 10% not on $100, but instead on $110, so you'd end up with $121.00. This happens with each investment that you make and with each year that passes, and it has a snowball effect.
The more you're able to invest and the more time you have for compound growth to work, the more powerful the impact is. But even if you don't have more than $100 a month to invest right now, you're better off getting the money into the stock market and getting it working for you so your snowball can start to build.
If you're not sure where to come up with an extra $100 a month, some possible options for you could include:
- Do a few hours of overtime or extra work. If you can earn $15 an hour, you'd only need to work for about seven hours during the course of the entire month to make $100 extra to invest. Many people can find seven hours.
- Go through your budget carefully. You can probably find one or more expenses to cut that add up to $100. Switching to a cheaper cellphone plan, canceling a streaming service you don't use much, and giving up one meal out would probably get you there.
Over time, if you can increase the amount you invest, that would be ideal as you can build even more wealth. But you don't have to worry about that when you're just getting started. Just begin with that first $100. As you see how your money grows, you may get excited about investing and find new ways to increase your contributions -- and thus the power of compound growth in your wealth-building efforts.
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FAQs
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
Is investing $100 a month worth it? ›
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
What happens if you invest $100 a month for 40 years? ›
In fact, if you invest $100 a month over 40 years, you could end up with a portfolio worth $531,000. However, that number hinges on a very big assumption, and it's that your portfolio is generating an average yearly 10% return. But achieving that 10% may be more doable than you'd think.
Is $100 a month good for a 401k? ›
Your Retirement Savings If You Save $100 a Month in a 401(k)
If you're age 25 and have 40 years to save until retirement, depositing $100 a month into a savings account earning the current average U.S. interest rate of 0.42% APY would get you to just $52,367 in retirement savings — not great.
How much will I get if I save $100 a month for 18 years? ›
If you save $100 a month for 18 years, your ending balance could be $35,400. If you save $100 a month for 9 years, your ending balance could be about $13,900.
How much will I have if I invest $100 a month for 5 years? ›
How $100 a month can help make you wealthy
| If you invest $100 a month for this many years... | ...this is how much you'll end up with. |
|---|
| 5 | $8,058.73 |
| 10 | $21,037.40 |
| 15 | $41,939.68 |
| 20 | $75,603.00 |
2 more rowsOct 1, 2023
If you're still investing $100 per month, you'd have a total of around $518,000 after 35 years, compared to $325,000 in that time period with a 10% return. There are never any guarantees in the stock market, but with the right strategy, a little cash can go a long way.
How much do I need to invest a month to become a millionaire in 10 years? ›
Now, let's consider how our calculations change if the time horizon is 10 years. If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.
What happens if you save $100 dollars a month for 10 years? ›
(Enter "$100" in the "Contribution amount" field, then select "Monthly" for the "Contribution frequency" option.) You would end up with $32,023.26 after 10 years, compounded daily (assuming 365 days a year). The interest would be $10,023.26 on total deposits of $22,000.
How much will I have if I invest $1000 a month for 30 years? ›
As a rule of thumb, the sooner you start saving for retirement the better. If you start by contributing $1,000 a month to a retirement account at age 30 or younger, your savings could be worth more than $1 million by the time you retire.
Kevin O'Leary: By Age 33, You Should Have $100K in Savings — How To Get Started. If you're just starting out in your career, $100,000 might seem like a lot of money. After all, the median salary of a 20- to 24-year-old, according to Bureau of Labor Statistics data, is just $37,024.
Can I retire at 70 with 300k? ›
If you've managed to save $300k successfully, there's a good chance you'll be able to retire comfortably, though you will have to make some compromises and consider your plans carefully if you want to make that your final figure.
How long will $300,000 last in 401k? ›
How long will $300,000 last in retirement? If you have $300,000 and withdraw 4% per year, that number could last you roughly 25 years. Thats $12,000, which is not enough to live on its own unless you have additional income like Social Security and own your own place. Luckily, that $300,000 can go up if you invest it.
Is investing $100 a month good? ›
Investing just $100 a month over a period of years can be a lucrative strategy to grow your wealth over time. Doing so allows for the benefit of compounding returns, where gains build off of previous gains.
How to build wealth with $100? ›
Below are some common methods, but keep in mind that they vary in the time it takes to grow your wealth as well as in risk level.
- Opening a high-yield savings account. ...
- Investing in stocks, bonds, crypto, and real estate. ...
- Online selling. ...
- Blogging or vlogging. ...
- Opening a Roth IRA. ...
- Freelancing and other side hustles.
If you're focused on long-term growth, investing $100 each month could be a good move for you. Many people invest through an IRA account. Check out our list of the best IRA accounts to learn more about how these investment accounts function.
What is a good amount of money to invest monthly? ›
Investing 15% of your income is generally a good rule of thumb to meet your long-term goals. Even if you can't afford to invest that much today, you can still start investing with what you can afford. Your investment amount may fluctuate as your cash flow changes, but staying consistent can pay off in the long run.
How much do I need to invest to make $1000 a month? ›
Treasury bills (T-bills) are short-term debt instruments that are paying out around 4.75% APY, giving you a guaranteed rate of return that is backed by the U.S. government. To make $1,000 per month on T-bills, you would need to invest $240,000 at a 5% rate.
How much should I invest a month to become a millionaire? ›
If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.
