Describe how you would invest. Drag any underlined number, or click it to type.
The solid line is plain compound interest: your starting amount and monthly deposits growing at the yearly rate you set. With fees, tax and inflation at zero it matches any compound interest calculator to the cent. Then fees, tax on gains and inflation come off, because what you keep is the number that matters.
Markets do not rise in a straight line. Every path is also run through 500 simulated futures, month by month, with yearly swings of the size you choose. The shaded band holds eight in ten of them, and the shape on the right of the chart shows every outcome for the year under your cursor.
All paths live through the same simulated markets. Paths in the same kind of investment get exactly the same ups and downs, so a lump sum against monthly investing is a pure question of timing. When one path ends ahead of another in 70% of futures, that is a fair comparison rather than the luck of two different dice.
The history view replays your plan from every possible start year using Robert Shiller's US stock returns and inflation, 1871 to 2022. It shows the best and worst times to have started, including 1929, the stagflation of the late 1960s and the dotcom crash.
Compound interest means your returns earn returns of their own. A year of growth is added to the balance, and the next year grows on that larger balance. Over long periods most of the final amount comes from this growth on growth rather than from what you put in, which is why the last years of a long plan add the most.
Type your starting amount, your monthly deposit and 20 years into the first sentence. The large figure is what you keep in the smooth case, after the tax due on cashing out. Under it you see the range that eight in ten simulated futures land in, and you can switch to today's money to take inflation out.
Because markets rise more often than they fall, money invested at once usually ends ahead of money fed in over a year, typically in about six out of ten futures. Spreading it out mainly protects you from the bad luck of investing just before a crash. Pick "All at once or spread out?" at the top to see both on your own numbers.
A handful of stocks can beat the index by a wide margin or trail it for decades. With the default assumptions the middle outcome moves only a little while the spread gets far wider in both directions, and the worst tenth of futures is much worse. The comparison shows how often each ends ahead and how deep the falls along the way are.
A fee is charged on the whole balance every year, not only on the gains, so it compounds against you. Over 25 years a 1.5% yearly fee can take roughly a quarter of the final amount. The page reports the cost of fees including the growth that money would have earned.
With the same investments, a tax free account keeps every gain, while an ordinary account pays tax on the profit when you sell. A pension with deferred tax invests the income tax you would have paid and taxes withdrawals instead. Set your own tax rates at the bottom of the sentences; most tax free accounts also cap yearly deposits, which is not modelled here.
Prices rise over time, so a million in 30 years buys far less than a million today. Today's money divides every future amount by the inflation you assume, so all figures show what they would buy now.
The presets are round long run figures, not forecasts: about 3% a year for savings, 4% for government bonds, 5.5% for a 60/40 fund, 7% for a global stock index and 8% with much larger swings for handpicked growth stocks. Every rate, swing and fee can be changed in the small print under each sentence.
No. Every calculation runs in your browser. The plan is kept in the page address and in this browser, so a link or a bookmark reopens exactly what you set up.