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

The Trump team receives a 3.2% first-quarter GDP boost as Federal Reserve halts the next interest rate hike in May 2019.

Olivia London

2019-05-07 09:30:00 Tuesday ET

The Trump team receives a 3.2% first-quarter GDP boost as Federal Reserve halts the next interest rate hike in May 2019.

The Trump team receives a 3.2% first-quarter GDP boost as Fed Chair Jay Powell halts the next interest rate hike in early-May 2019. This smooth upward econo

+See More

Dallas Federal Reserve Bank President Robert Kaplan expects the U.S. economy to grow at 2.2%-2.5% in 2019-2020.

Becky Berkman

2019-06-11 12:33:00 Tuesday ET

Dallas Federal Reserve Bank President Robert Kaplan expects the U.S. economy to grow at 2.2%-2.5% in 2019-2020.

Dallas Federal Reserve Bank President Robert Kaplan expects the U.S. economy to grow at 2.2%-2.5% in 2019-2020 as inflation rises a bit. In an interview wit

+See More

Warren Buffett points out that many people misunderstand his stock investment method in several ways.

Jonah Whanau

2017-06-21 05:36:00 Wednesday ET

Warren Buffett points out that many people misunderstand his stock investment method in several ways.

In his latest Berkshire Hathaway annual letter to shareholders, Warren Buffett points out that many people misunderstand his stock investment method in seve

+See More

The global asset management industry is central to modern capitalism.

Amy Hamilton

2022-02-22 09:30:00 Tuesday ET

The global asset management industry is central to modern capitalism.

The global asset management industry is central to modern capitalism. Mutual funds, pension funds, sovereign wealth funds, endowment trusts, and asset ma

+See More

Fed's new chairman Jerome Powell testifies before Congress for the first time.

Rose Prince

2018-02-27 09:35:00 Tuesday ET

Fed's new chairman Jerome Powell testifies before Congress for the first time.

Fed's new chairman Jerome Powell testifies before Congress for the first time. He vows to prevent price instability for U.S. consumers, firms, and finan

+See More

Dr Karl Ulrich explains that many elite universities now provide massive open online courses (MOOCs) for lifelong learners to achieve their medium-term goals for better intellectual focus, immersion, personal growth, and self-improvement.

Charlene Vos

2025-08-09 11:31:00 Saturday ET

Dr Karl Ulrich explains that many elite universities now provide massive open online courses (MOOCs) for lifelong learners to achieve their medium-term goals for better intellectual focus, immersion, personal growth, and self-improvement.

Wharton e-commerce entrepreneurship professor Dr Karl Ulrich explains that many top-notch universities now provide massive open online courses (MOOCs) for m

+See More