How investments grow over time
This projects the future value of an investment that starts with a lump sum and then adds a fixed amount every month, with the whole balance compounding at your expected return. It is the engine behind most long-term wealth building: steady contributions, left to grow, doing more work each year than the year before.
The striking pattern is how the balance splits over time. Early on, almost all of it is money you put in. Later, growth on past growth takes over, and by the end the returns can dwarf your contributions. The longer the horizon, the more lopsided that split becomes in your favour.
Two examples
Start with 1,000, add 200 a month for 20 years at an 8% return. The pot grows to roughly 122,000. You contributed about 49,000 of that, so more than 70,000 is pure growth.
Keep everything identical but run it for 30 years instead of 20. The pot climbs past 300,000. Ten extra years of the same 200 a month more than doubled the result, because those final years compound on the largest balance you ever held.
Making it work harder
- Automate the monthly contribution. Consistency matters more than timing the market.
- Raise the amount as your income grows. Even small yearly increases compound into a lot.
- Give it time and leave it alone. Selling in a dip locks in losses and cuts the compounding short.
A reality check
These are nominal figures before inflation and tax, and real returns bounce around year to year rather than arriving in a smooth 8% every time. Markets fall as well as rise. Use a sensible long-term return, treat the number as an estimate rather than a promise, and remember this is a planning tool, not financial advice.
Frequently asked questions
How is this different from the compound interest calculator?
This one adds a regular monthly contribution on top of the starting amount. Compound interest grows a single lump sum with no further deposits.
What return is realistic?
Use a sensible long-term average for your chosen investments. Higher assumptions flatter the result but rarely hold in every year.
Is this before or after inflation?
Before. It shows nominal future value. Use the inflation calculator to see what that sum would buy in today's money.
What return should I use?
A realistic long-term average for your chosen investments. Higher assumptions make the result look better but riskier.
Does it guarantee results?
No. Investment returns fluctuate and can be negative. This is a planning estimate only, not financial advice.