Let’s crunch some numbers.
Say you take home
$3,000 per month, and you decide to invest
$250 of that each month into the
S&P 500.
Historically, the S&P 500 has generated an average return of
9–10% annually.
Let’s be conservative and assume a
9% return.
If you invest
$250 every month for 20 years, your investment would grow to approximately
$160,864.
Stretch that to
25 years, and the number
soars to $266,327.
Investing always beats letting your money sit in a bank account that earns, at best,
1.5% interest per year—and that’s if you’re really lucky.
So, here’s the smart approach:
Always keep enough money in your bank account to cover
basic bills and build an
emergency fund for unexpected expenses like dental work, medical bills, or car repairs.
Then,
invest 80% of whatever is left over.
Your future self will thank you.
