Seeing as how the cost of everything from housing to groceries to healthcare is downright exorbitant these days, it's hard to imagine being in a position where you're sitting on $10,000 that isn't earmarked for incoming bills. But maybe, just maybe, you're in that fortunate position due to a generous gift from a family member, a bonus at work, or careful financial planning of your own.
Either way, if you have $10,000 on hand, you may be hesitant to invest it. After all, that's money you could be using to improve your life in the near term. And let's be real -- investing in stocks carries some risk. So if you're finally in a place where you've gotten your hands on some money, you may not want to just throw it into the stock market and hope for the best.
But one thing you should know is that by not investing in stocks, you're doing yourself a disservice by denying your money the chance of immense growth. And once you see what a $10,000 investment could turn into over 30 years, you may be more eager to embrace the idea of owning stocks.
How does 17.5-times your initial investment sound?
Over the past 50 years, the stock market, as measured by the performance of the S&P 500 index, has generated an average annual 10% return. So if you put $10,000 into the market today and wait 30 years, there's a strong chance you'll enjoy a similar return. And if so, you could turn your $10,000 into almost $175,000.
Now let's compare that to keeping money in savings. Today's savings account rates aren't the norm, so let's assume that keeping your $10,000 in cash results in an average annual 2% return over 30 years. In that case, you're growing your $10,000 into about $18,000.
And hey, look, that's more than what you started with, so that's a win by itself. But when you compare $18,000 to $175,000, well, there's really no comparison.
Ways to make stock investing less risky
Of course, the benefit of keeping your money in cash is that you don't risk losing it provided your bank is FDIC-insured. There is a risk of losing money in the stock market.
But you can mitigate that risk in a few ways:
- Invest over a long period of time: The 10% average annual return mentioned above accounts for many periods of stock market declines. But ultimately, during the past half-century, the market's gains have clearly outpaced its losses.
- Aim to maintain a diversified portfolio of stocks: One really easy way to do this is to load up on S&P 500 ETFs, or exchange-traded funds. This way, what you're basically doing is putting your money into the broad market rather than limiting yourself to a handful of stocks that may or may not perform well.
Northwestern Mutual says that the average baby boomer has $120,300 saved for retirement. If you're able to put $10,000 into the market today and leave it be for 30 years, you may end up with considerably more from that single investment alone. So even if buying stocks doesn't exactly land in your comfort zone, it's worth pushing yourself for the financial upside.
FAQs
Over the past 50 years, the stock market, as measured by the performance of the S&P 500 index, has generated an average annual 10% return. So if you put $10,000 into the market today and wait 30 years, there's a strong chance you'll enjoy a similar return. And if so, you could turn your $10,000 into almost $175,000.
How much will $10,000 be worth in 30 years? ›
If you can manage to earn a 10% return on your investment every year for 30 years, your $10,000 could grow to as much as $174,000—all without contributing another penny on top of your original investment. That's the magic of compound interest.
How much would $10000 invested in Apple 20 years ago be worth today? ›
Those gains translate to a 36.2% compound annual growth rate (CAGR) for Apple compared to an 8.5% CAGR for the S&P 500 in that time. That means that $10,000 in AAPL stock purchased 20 years ago would be worth more than $4.85 million today, assuming reinvested dividends.
What will 10k be worth in 20 years? ›
For our example, let's say you invest $10,000 in a 401(k) today and you aim to withdraw it in 20 years. While it's invested, you earn a 10% average annual return. After two decades, your $10,000 would be worth $67,275.
How much will I have in 30 years if I invest $1000 a month? ›
How much money will I have if I invest $1,000 a month for 30 years? Investing $1,000 a month for 30 years, with an average annual return of 7%, can yield a total of approximately $1.22 million. This calculation shows how regular, long-term investments can grow significantly over time, thanks to compound interest.
Where to put 10K right now? ›
Best ways to invest $10,000: 10 proven strategies
- Pay off high-interest debt.
- Build an emergency fund.
- Open a high-yield savings account.
- Build a CD ladder.
- Get your 401(k) match.
- Max out your IRA.
- Invest through a self-directed brokerage account.
- Invest in a REIT.
To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.
How much is $10,000 invested in Amazon 20 years ago? ›
Those gains translate to a 23.2% compound annual growth rate for Amazon compared to a 6.2% CAGR for the S&P 500 in that time. As a result, $10,000 in AMZN stock purchased 20 years ago would now be worth $645,262. A $10,000 investment in the S&P over the same period, however, would amount to $33,452.
How much will $1,000 invested be worth in 20 years? ›
The table below shows the present value (PV) of $1,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
What if you invested $1 000 in Apple 20 years ago? ›
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $448,000. The same $1,000 invested in the S&P 500 would theoretically have turned into about $7,300 over the same period.
How To Turn 10k Into 100k
- Invest in Real Estate. ...
- Invest in Cryptocurrency. ...
- Invest in The Stock Market. ...
- Start an E-Commerce Business. ...
- Open A High-Interest Savings Account. ...
- Invest in Small Enterprises. ...
- Try Peer-to-peer Lending. ...
- Start A Website Blog.
Real growth rates
| One time saving $1 (taxable account) |
|---|
| After # years | Nominal value | Real value |
|---|
| 30 | 7.07 | 2.91 |
| 35 | 10.04 | 3.57 |
| 40 | 14.31 | 4.39 |
7 more rowsAnswer and Explanation: The amount of $100,000 will grow to $432,194.24 after 30 years at a 5% annual return. The amount of $100,000 will grow to $1,006,265.69 after 30 years at an 8% annual return.
How much is $100 a month for 30 years? ›
If you save $100 a month for 30 years, your ending balance may only come to about $197,000, assuming that same 10% return. That's a decent amount of savings -- and about $77,000 more than the average baby boomer has today, according to Northwestern Mutual. But it's a far cry from $531,000.
How much is $500 a month invested for 30 years? ›
What happens when you invest $500 a month
| Rate of return | 10 years | 30 years |
|---|
| 4% | $72,000 | $336,500 |
| 6% | $79,000 | $474,300 |
| 8% | $86,900 | $679,700 |
| 10% | $95,600 | $987,000 |
Nov 15, 2023
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
What is the value of money after 30 years? ›
After 30 years, the value of one lakh will be around INR 23,000, assuming an annual inflation rate of 5%. What is the value of 1 lakh in 2050? In 2050, one lakh rupees will be worth INR 8,06,298. In this case, an 11.25% anticipated rate of return is estimated.
How much will $1000 be in 20 years? ›
As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
| Discount Rate | Present Value | Future Value |
|---|
| 17% | $1,000 | $23,105.60 |
| 18% | $1,000 | $27,393.03 |
| 19% | $1,000 | $32,429.42 |
| 20% | $1,000 | $38,337.60 |
25 more rowsInvesting $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.
