The table that sums it up
To reach $1,000,000 by investing every month at an average return of 7% a year, starting from zero: over 40 years you need about $381 a month; over 35 years, about $555; over 30 years, about $820; over 25 years, about $1,234; over 20 years, about $1,920.
Look at the jump: going from 40 to 30 years does not ask for 25% more each month, it asks for more than double. And from 30 to 20 years, more than double again.
Why time matters so much
With compound interest you also earn returns on the gains of previous years. At first you barely notice. Over time, what the money itself generates ends up being far more than what you put in.
An example: $500 a month for 30 years at 7% adds up to about $610,000. Of that, you put in $180,000. The rest, around $430,000, the money made on its own. Over 40 years, the same $500 a month reaches about $1.31 million with only $240,000 paid in.
Is 7% realistic?
Global stock indexes have returned roughly 7% to 9% a year over long periods, before inflation. 7% is a cautious assumption, but not a promise: there will be years with 30% falls and years with 25% gains.
Also remember that a million in 30 years will not buy what it buys today. With 2% yearly inflation, it is worth about $550,000 in today’s money. Still a lot, but worth knowing.
Fees: the silent enemy
A 1% fee sounds small, but it eats part of your return every year, for decades. With $500 a month for 30 years, going from 7% to 6% net leaves you with about $502,000 instead of $610,000: over $100,000 less for that “only 1%”.
That is why low-cost index funds are so popular for this kind of goal.
Frequently asked questions
What if I already have some savings?
It helps a lot, because that money has more years to grow. In the calculator you can enter what you already have invested and see how much the monthly amount drops.
Should I wait until I earn more to start?
Usually not. Starting small and raising your contribution later tends to beat waiting until you can put in a lot, because the first years have the most time to grow.
Do I have to invest the same amount every month?
It is not required, but doing it automatically every month avoids the temptation to guess the best moment.
More guides
Educational content. Not financial advice: past returns do not guarantee future ones.