Just read that a 30 year old who starts saving $500 a month could have over a million by 65

I was looking at a compound interest calculator on a bank's website and plugged in those numbers with a 7% average return. The total after 35 years was something like $1.1 million, which is way more than I would have guessed from just $500. Does that 7% return seem realistic for a basic index fund over that long a period?

2 comments

2 Comments

alicebarnes1mo ago

Yeah 7% is actually a bit conservative for the S&P 500's long-term average after inflation. The nominal average is closer to 10%.

quinn_kim451mo ago

Totally agree with that... I had the same shock when I first ran the numbers. Put a few hundred bucks into a total market fund every month and just forget about it. The math really does work if you stick with it and don't panic during the bad years. That 7% figure is a good, safe guess for planning... the actual long-term average is even a bit higher like they said. It's crazy how much just being steady adds up over decades.