By slowly adding to your portfolio over time, you can set an achievable investment goal for retirement.
Investing for the future can be difficult, as unexpected expenses always seem to come up. One way to try to encourage yourself to invest is by not aiming for massive savings goals. Instead, slowly putting aside money on a weekly basis can be much more achievable, and still allow you to build up your portfolio's balance over the long haul.
And if you can do that, you could be on the path to creating a tremendous portfolio by the time you retire. Below, I'll show you how saving and investing $50 per week can ultimately transform into $35,000 or more in annual dividend income by the time you retire.
How saving $50 per week can result in a portfolio worth around $800,000
If you invest $50 per week, that's the equivalent of $200 per month, or approximately $2,400 per year. Over a 30-year period, that would result in more than $72,000 in savings. It's a good chunk of savings, but it isn't a life-changing amount.
This is where the power of compounding comes into play. If instead of putting that $50 into your bank every week, you invested it into an exchange-traded fund (ETF), you could accelerate your portfolio's growth significantly. Suppose, for example, that you invest that money in a fund such as the Invesco QQQ Trust (QQQ 0.98%).
That fund tracks the top 100 non-financial stocks on the Nasdaq, and it can help give you exposure to some of the best growth stocks in the world, including Microsoft, Nvidia, Apple, and many others. Over the past 20 years, the fund has generated total returns (including dividends) of 1,3950%. That averages out to a compounded annual growth rate of 14.4%. For the sake of being conservative, let's assume that the growth rate you might average from that fund moving forward might be closer to around 12%.
Assuming you were to invest $50 per week into the fund, this is how your portfolio balance could climb over a 30-year period.
| Year | Balance |
| 5 | $17,826.34 |
| 10 | $50,285.59 |
| 15 | $109,389.35 |
| 20 | $217,009.00 |
| 25 | $412,969.27 |
| 30 | $769,785.45 |
Calculations by author.
By year 30, your portfolio could be worth around $770,000. The actual growth rate you average over that period will ultimately determine how high the balance will be. But it would be a much larger nest egg than simply saving that $50 per week and tucking it away into a bank account.
Turning that savings into a stream of recurring dividend income
Once you have that nest egg built up, you can put it to work accumulating dividend income for you. An example of a dividend-focused fund you could invest in today is the Vanguard International High Dividend Yield Index Fund, which yields around 4.9%. At that high of a rate, you could generate more than $37,000 in annual dividends per year.
You don't have to aim that high, however. As long as you can obtain a yield of around 4.6%, that would be enough to generate $35,000 in dividend income based on a portfolio balance of $770,000. And if you can get your portfolio even higher than that, then you would need even less of a yield to achieve that level of dividend income.
Saving and investing is a powerful combination
You may not have thousands of dollars saved up today, but any amount you can save and put into an ETF can help pave the way for a better future in the long run.
In the above example, I used $50 per week, but if you can save and invest more, that can help accelerate your portfolio's growth, which is why the number of investing years you have left may not be of utmost importance; you can make up for having fewer years remaining until retirement by saving and allocating more money to your portfolio.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends Nasdaq and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
FAQs
As long as you can obtain a yield of around 4.6%, that would be enough to generate $35,000 in dividend income based on a portfolio balance of $770,000. And if you can get your portfolio even higher than that, then you would need even less of a yield to achieve that level of dividend income.
How much money will I have if I save $50 a week? ›
Investing $50 a week, which translates to approximately $200 a month, is an excellent way to build your savings without putting a significant strain on your budget. Over a year, you'll have invested $2,600, and this consistency is key.
How much money do I need to invest to make $3,000 a month? ›
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
How much is $50 a week for 20 years? ›
By doing this, you can create a large amount of income every year. By putting $50 aside each week, that will add up to $2,400 per year! Over time, sure, that could create, say, $48,000 over 20 years. However, invest it, and you can create an even larger portfolio.
How much is $100 a month invested from 25 to 65? ›
$100 a month invested from age 25 to 65 is $1,176,000. You do NOT have to retire broke. A lot of people will want to argue with me on that rate of return. But here's the truth: Historically, the 30-year average return of the S&P 500 has been about 10–12%.
What is the $5000 savings challenge in 52 weeks? ›
This 52 Week Money Challenge To $5 K is easy to use. There's a total of 52 amounts and each one of them represents one week. You don't have to go in order, choose any amount and save it. Once you have that amount saved, cross it in and see your progress grow!
How much is 50 dollars a week for a year? ›
$50 weekly is how much per year? If you make $50 per week, your Yearly salary would be $2,600.
How much money do I need to invest to make $4000 a month? ›
Receiving $4,000 per month translates into an annual total of $48,000, excluding the need to pay any income taxes. With a 4% dividend yield, it'd take a required portfolio size of $1.2 million to make that cash flow of $48,000. Of course, having a higher dividend yield would mean less of a required nest egg.
How to make $3,000 a month in dividends? ›
If the average dividend yield of your portfolio is 4%, you'd need a substantial investment to generate $3,000 per month. To be precise, you'd need an investment of $900,000. This is calculated as follows: $3,000 X 12 months = $36,000 per year.
How much money do I need to invest to make $1000 a month? ›
Invest in Dividend Stocks
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Getting by on $1,000 a month may not be easy, especially when inflation seems to make everything more expensive. But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money.
How much is 40 dollars every week for a year? ›
$40 weekly is how much per year? If you make $40 per week, your Yearly salary would be $2,080.
How much is $100 a week for one year? ›
The first thing we need to know is how much $100 per week works out to on an annualized basis. There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200.
How much will I have if I invest $1000 a month for 30 years? ›
Investing $1,000 per month for 30 years at a 6% rate of return hypothetically will give you an investment portfolio worth more than $1 million. This result is hypothetical because it doesn't take into account taxes, fees, varying rates of return and other variables, such as extended market downturns.
How much do I need to invest per month to retire a millionaire? ›
To become a millionaire by age 65, you'd need to save $3,000 each month. For many, this may not be realistic, but try to get as close to this number as you can. If you begin saving five years earlier, at age 45, you'll have a little more flexibility, but your budget will still be tight.
What if I invested $1000 in S&P 500 10 years ago? ›
So imagine you put $1,000 into either fund 10 years ago. You'd be up to roughly $3,282 with VOO or $3,302 from SPY. That's not exactly wealthy, but it shows how you can more than triple your money by holding an asset with relatively low long-term risk.
How to survive on $50 a week? ›
How to Save on Weekly Groceries
- Shop your fridge, pantry, and freezer first. ...
- Keep versatile basics in the pantry. ...
- Maximize freezer space. ...
- Make a meal plan. ...
- Buy the ingredients you use the most in bulk, but ONLY if they're non-perishable or have a long shelf life. ...
- Repurpose your leftovers.
For anyone trying to improve their savings in 2024, the 52-week money challenge is a simple and effective way to stay on track. And at the end of the year, you'll have $1,378 extra dollars to bulk up your emergency savings or put toward a savings goal, such as a vacation fund or a down payment on a home.
How much should I save weekly to get to 5000 dollars? ›
For instance, if you're paid weekly, aim to save around $97 each week. If you're paid biweekly, aim for roughly $193 every paycheck. And if you're on a monthly pay schedule, try to save around $417 a month. Rather than focusing on saving $5,000 as a whole, you can focus on smaller milestones.
How much would I have if I saved $100 a week? ›
The first thing we need to know is how much $100 per week works out to on an annualized basis. There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200.
