Lux Investing
Value if $25K Invested over 10, 25, 50 years?
Just curious what $10K, $25K, even $50K invested today in the markets would be worth in the future...assuming I don't add anything else. Or, what if I added $250-$500/month every year?
Public Comments
- GIVE ME THE BEST ANSWER AND I WILL TELL YOU
- If you invested a flat 25k, at a gross return (income & growth) of say 6% less say 2% inflation which gives 4% net growth per year the value after 10 years will be $37,000 25 years it will be $66,600 and 50 years will be $177,667. If invested an additional 250 per month over 10 years = $74000, over 25 years $196,000 and 50 years $661,450 Shows the power of compounding doesnt it Hope this helps
- The second answer is correct. Smart to include inflation. Most people forget it. I would go w/ 3% inflation instead. Here is the formula for future reference. r = interest in a yr i = inflation tr = r - i; let's say 8% from stocket minus 3% inflation which is 5% F = future value P = present value N = yrs F = P *(1 + tr)^N 1. F = 50,000 (1 + 0.05)^50 Now you want to add $500 a month. It's an annuity question now. Take 500 x 12 because the formula is in terms of yrs, which means you add $6,000 each yr. Let's assume the same true interest (stated interest minus inflation). A = Added cash flow each yr FV = A[ ((1+rt)^N -1)/rt] 2. FV = 6,000[((1.05)^49-1)/0.05] Noticed I used 49 instead of 50. It's because the formula was designed to calculate a payment next yr. Go figure. Simply use the 1st equation to solve for the single $6,000. 3. FV =6,000(1.05)^50 Now sum up lines 1,2, and 3. I know it's a lot of math. I don't have a calc in front of me. Good luck. Start saving early and often. You don't want to eat cat food when you're old and can't work.
- You can just plug in the numbers in this calculator and check all the scenarios you want.... http://www.geocities.com/twong18
