Tuesday, February 2, 2016

Financial Thought of the Day February 2, 2016: Here’s What 10% Can Get You


Building wealth is a function of amount invested, the rate of return and time. Yesterday, I illustrated how much 2%, which represents a risk free rate of return, can get you over time given a $1,000 investment. Today, I will illustrate what 10% will get you. You have to take a little more risk to get this rate of return by investing in a mutual fund and there is no guarantee you will get it (see table below).

$1,000 Amount
Time
Rate
Amount After Compounding
10 Years
10%
$2,593.74
20 Years
10%
$6,727.50
30 Years
10%
$17,449.40
40 Years
10%
$45,259.26
50 Years
10%
$117,390.85


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