Millennials can save to make a fortune with compound interest over 40 years.

Laura Hermes

2017-07-25 10:44:00 Tue ET

NerdWallet's new simulation suggests that a 25-year-old millennial who earns an inflation-free base salary of $40,456 and saves 15% each year faces a 99%+ chance of maintaining at least his or her initial investment over 40 years.

This analysis shows that the adverse effects of even significant downturns can be smoothed out by a long-term fundamental investment strategy, if the investor is willing to stay the course.

Given the opportunity cost of avoiding the stock market altogether (which could be as much as $3 million over 40 years) and the monetary benefits of compound interest for 4 decades, the bigger real risk may be not investing in stocks at all.

Although past stock market performance cannot guarantee that the typical investor earns a hefty 10% average historical return in the future, the core value of investing in stocks with compound interest can be significant over a long time.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018.

Charlene Vos

2018-12-22 14:38:00 Saturday ET

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018.

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018. Fed Chair Jerome Powell highlights the dovish interest ra

+See More

Main reasons for share repurchases

Apple Boston

2022-09-25 09:34:00 Sunday ET

Main reasons for share repurchases

Main reasons for share repurchases Temporary market undervaluation often induces corporate incumbents to initiate a share repurchase program to boost the

+See More

The U.S. stock market delivers a hefty long-term average return of 11% per annum.

Peter Prince

2017-03-09 05:32:00 Thursday ET

The U.S. stock market delivers a hefty long-term average return of 11% per annum.

From 1927 to 2017, the U.S. stock market has delivered a hefty average return of about 11% per annum. The U.S. average stock market return is high in stark

+See More

Analytic business competitors apply smart data science to support their distinctive capabilities and strategic advantages.

Peter Prince

2020-11-24 09:30:00 Tuesday ET

Analytic business competitors apply smart data science to support their distinctive capabilities and strategic advantages.

Many analytic business competitors can apply smart data science to support their distinctive capabilities and strategic advantages. Thomas Davenport and

+See More

Anne Krueger explains why the Trump administration's current tariff tactics undermine the multilateral global trade system.

Fiona Sydney

2018-09-21 09:41:00 Friday ET

Anne Krueger explains why the Trump administration's current tariff tactics undermine the multilateral global trade system.

Former World Bank and IMF chief advisor Anne Krueger explains why the Trump administration's current tariff tactics undermine the multilateral global tr

+See More

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence and smart data analysis.

Peter Prince

2017-12-01 06:30:00 Friday ET

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence and smart data analysis.

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence, smart data analysis, and robotic automation. With prior IT careers at Apple, M

+See More