Compound Interest Calculator - $1,000 Per Month for 30 Years Equals $1,468,150.42

The single most powerful tool I have found for motivating myself to take retirement investing seriously is a compound interest calculator, such as the one found here:

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Let's do a sample calculation with the following assumptions:

  • Start with a $0 balance today
  • Contribution of $1,000 per month
  • Average annual growth of 8%
  • Compounding for 30 years

According to the compound interest calculator, this yields a future value of $1,468,150.42.

This number should surely grab your attention.  If this doesn't motivate you to start taking retirement investing seriously, I don't know what will!  Investing only $1,000 per month can make you a millionaire.

Now let's say you wait 5 years to begin investing, and you invest for only 25 years instead of 30 years.  This yields a future value of only $947,452.98

This is a dramatic difference.  Waiting five years to begin investing can cost you half a million dollars in your future retirement.  So, young people reading this: start investing now, right now, today!  You will thank yourself later.

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