Final Balance
$0
Your Contributions
$0
Total Growth
$0
Investment Trajectory
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What is the Investment Growth Calculator?
The Investment Growth calculator projects how your diversified portfolio of stocks, bonds, or ETFs will grow over a long-term horizon. Unlike a simple bank interest calculator, this tool allows you to factor in inflation, giving you the “real” purchasing power of your future wealth in today’s dollars.
How to Use This Tool
- Monthly Contribution: Representing Dollar-Cost Averaging (DCA).
- Expected Return: The nominal rate of return before inflation.
- Inflation Rate: Historically averages around 2-3%. Factoring this in shows you what your future millions will actually be able to buy.
Frequently Asked Questions
What is the difference between nominal and real returns?
Nominal return is the raw percentage your portfolio grew (e.g., 8%). Real return is the nominal return minus inflation (e.g., 8% – 3% inflation = 5% real return). Real returns measure your actual increase in purchasing power.
Should I invest a lump sum or dollar-cost average?
Statistically, investing a lump sum immediately beats dollar-cost averaging about 66% of the time because markets generally trend upward. However, dollar-cost averaging is emotionally easier for many investors.