How to turn $100 a week into $1 million with compound interest

Compound interest is one of the most exciting financial phenomena. Why? That’s earning interest on interest!

Earn 10% annual compound interest and your $100 will turn into $110 after the first year (+$10), $121 after the second (+$21) and $133.10 after the third (+33.10) $).

Note that the amount of interest you earn each year increases exponentially. It can lead to amazing things, given enough time.

Assuming an annual interest rate of 7.5%, you would become a millionaire in less than 38 years simply by contributing $100 a week.

Because of the way compound interest – well, compound on itself – time is the most critical element. With enough time, you don’t have to contribute a lot of money to build real wealth.

Let’s take these concepts and look at how much money you would get from compound interest based on your weekly contributions, interest rate, and term.

Keep in mind that if you’re investing, there are real and nominal costs to consider, such as annual fees, taxes, and inflation. They are only illustrations to help you understand the relationship between time, interest, regular contributions and wealth.

5% interest rate

Weekly contribution 10 years 20 years 30 years 40 years 50 years
$50 $33,445.87 $87,925.66 $176,667.50 $321,218.60 $556,677.12
$100 $66,890.19 $175,847.26 $353,326.84 $642,422.38 $1,113,328.56
$250 $167,226.24 $439,620.17 $883,321.18 $1,606,063.37 $2,783,334.24
$500 $334,454.03 $879,244.40 $1,766,650.52 $3,212,141.56 $5,566,694.16
$1,000 $668,906.52 $1,758,484.75 $3,533,292.88 $6,424,268.30 $11,133,362.64

Historically, you can invest in a low-risk, very conservative portfolio and earn an average annual return of 5% over decades.

Even with a conservative investment approach, by contributing $500 a week, you would reach $1 million in less than 22 years.


7.5% interest rate

Weekly contribution 10 years 20 years 30 years 40 years 50 years
$50 $38,030.90 $116,413.78 $277,963.38 $610,922.20 $1,297,160.85
$100 $76,060.04 $232,822.20 $555,913.94 $1,221,816.21 $2,594,261.82
$250 190 $150.99 $582,058.17 $1,389,791.26 $3,054,554.63 $6,485,684.49
$500 $380,303.73 $1,164,121.72 $2,779,595.34 $6,109,137.46 $12,971,428.85
$1,000 $760,605.71 $2,328,238.07 $5,559,177.85 $12,218,246.72 $25,942,797.83

Historically, the S&P 500 has averaged an annual inflation-adjusted return of around 8%. This chart assumes a return on investment half a point lower than these historical returns.

At 7.5%, by contributing just $100 a week, you would become a millionaire in less than 38 years.


10% interest rate

Weekly contribution 10 years 20 years 30 years 40 years 50 years
$50 $43,304.50 $155,625.23 $446,956.26 $1,202,593.93 $3,162,523.45
$100 $86,607.01 $311,243.27 $893,891.89 $2,405,132.36 $6,324,900.94
$250 $216,518.51 $778,111.77 $2,234,740.05 $6,012,858.66 $15,812,325.33
$500 $433,039.02 $1,556,230.72 $4,469,500.72 $12,025,772.82 $31,624,796.61
$1,000 $866,076.05 $3,112,454.26 $8,938,980.82 $24,051,490.14 $63,249,447.26

It is not easy to achieve a 10% annual return for a long period of time. This almost always requires beating the stock market, especially over 20+ years. This is not necessarily a realistic or desirable goal due to the risks involved.

With the right approach, many people can achieve financial freedom in retirement simply by following the market.

But the chart above is a great illustration of how effective compound interest really is. With annual returns of 10% and a weekly contribution of $500, it would take you less than 17 years to become a millionaire!


Clark’s investment advice: the best companies, where to put your money

Now that you know how powerful compound interest is, you may be wondering where and how to invest.

Clark’s favorite investment recommendation, especially in a tax-advantaged retirement account such as a 401(k) or IRA, is a target date fund. Clark calls these funds “the easy button” of investing. You simply choose the year closest to your retirement and put all your investment money into it.

With a 401(k) account, you probably won’t have a choice of which company manages your account. But with an IRA — or if you’re investing in a brokerage account yourself — Clark prefers Fidelity, Schawb, or Vanguard.

Need a strategic overview to repay your debts, save and invest? Here’s how Clark examines these three main financial pillars.


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