A dollar a day feels too small to invest, but at a hypothetical 7% annual return, your $30 a month grows to about $37,000 in 30 years. Automate that deposit in an investing app, and raise it by 50 cents a day, or $15 a month, every January.
Your deposits would total just $10,800 over those 30 years, so the other $26,000 or so is investment growth, more than twice what you put in.
The Securities and Exchange Commission’s compound interest calculator at Investor.gov runs the same math for three daily amounts, at a hypothetical 7% return a year, with growth added monthly:
- $1 a day, or $30 a month, grows to about $5,000 in 10 years, $16,000 in 20, and $37,000 in 30.
- $3 a day, or $90 a month, grows to about $16,000, $47,000, and $110,000.
- $5 a day, or $150 a month, grows to about $26,000, $78,000, and $183,000.
At $1 a day, the third decade adds about $21,000, more than the $16,000 built in the first two, which is why starting at 25 instead of 35 matters so much. Actual returns change from year to year, and some years lose money, so treat these figures as illustrations, not promises.
Make the deposit automatic, weekly or monthly, so it happens whether or not you remember. A $7 weekly deposit does the same job as $30 a month. Choose an investing app with no monthly fee, since a $3 monthly charge would cost 10% of each $30 deposit.
Then raise the deposit by 50 cents a day, or $15 a month, every January or whenever your pay goes up. Here’s that plan at the same hypothetical 7%, starting at $1 a day at age 25. By 44 you’re investing $10.50 a day without one big jump. Those 20 years of deposits total $41,400 and grow to about $72,000, against about $16,000 from $7,200 at a flat dollar a day.
Schedule the first $30 deposit this week, and put a recurring January reminder on your calendar to add $15 a month.
Find an account for the deposits among the best investing apps.
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