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The snowball effect

Compound Interest Calculator

At first, almost all the value is money you put in yourself; over the years, the market takes over. This is that curve, from the inside.

Your contribution
What you already have saved today
What you start with in year one
At zero: you contribute the same amount every year
Market and time
Global stock markets have historically averaged around 7-8% over the very long term
How long you keep the plan running
Accounts for the loss of purchasing power
Scenarios

None of these three is a prediction: they're three assumptions worth testing against the same plan before trusting the result in the middle.

from the market
Total contributed
Market gains
Nominal value
Final value (inflation-adjusted)
What you contributed What the market generated Inflation-adjusted value If left in the bank (≈1%)

The crossover year

Year by year, in full detail

Year Monthly
contrib.
$/mo
Contrib.
this year
Year $
Contrib.
cumul.
Cumul.
Interest
this year
Int. yr
Interest
cumul.
Int. cum.
Total balancenominalBalance Total balanceinflation-adj.Real balance SplitSplit

The three numbers that sum up the plan

The same figures as above, expressed in the units you actually think in: multiples and dollars per month.

Multiplier
4% withdrawal income
What the portfolio would pay per month withdrawing 4% a year, inflation-adjusted
Lost to inflation

What if my assumptions are wrong?

No assumption ever holds exactly. This table moves one at a time, keeping the others fixed, and shows the final inflation-adjusted balance.

If I change…LowerYour assumptionsHigher

How much capital do you need to live off this, or how many years do you have left? Those two questions have their own tools, built around the 4% rule and its nuances: the FI number calculator and the time to FI calculator. Capital gains tax typically applies only when you sell or withdraw.

Next step

How much do you need to save to stop depending on a paycheck?

This calculator shows how your money grows. The FI number calculator tells you how much capital you actually need, using the 4% rule and its nuances.

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What each figure means

A quick look at each field and each result.

Initial investment

What you already have saved today and put in all at once, in the first month.

Monthly contribution

What you add each month from there on. It's the variable you control the most.

Annual increase

If you contribute a bit more each year (say, from a raise), this is where you set that percentage. At zero, you contribute the same amount every year.

Average annual return

What your investment earns on average each year. It's not a promise — it's the assumption everything else is calculated from.

Average annual inflation

How much prices rise each year. It's subtracted from the nominal result to show what you'll actually be able to buy with that money.

Total contributed

The sum of all the money that has come out of your own pocket: the initial investment plus the monthly contributions.

Market gains

What the final balance has above what you contributed: the money the investment generated, not you.

Final value (inflation-adjusted)

The nominal value translated into today's purchasing power. It's the figure that actually matters for comparing against a cost today.

Multiplier

How many times each dollar you put in has multiplied. It rises with time even if you contribute little: that's the effect of compound interest, not the amount.

Crossover year

The first year in which what the market has generated exceeds everything you've put in. From that point on, the snowball rolls on its own.

How to use this calculator

Steps to use the calculator (expand)
  1. Initial investment: Enter what you already have saved today that you'll put in all at once. Leave it at 0 if you're starting from scratch.
  2. Monthly contribution: Set how much you'll put in each month. This is the variable you control the most.
  3. Average annual return: Use the quick buttons (Pessimistic 5%, Moderate 7.5%, Optimistic 10%) or the slider for your assumption. It's not a prediction — it's the scenario everything is calculated from.
  4. Average annual inflation: This is subtracted from the result to show real purchasing power. It defaults to 2.5% — adjust it if your assumption differs.
  5. Years: How long you'll be investing. The longer the horizon, the harder compound interest works.
  6. Annual increase (optional): If you contribute a % more each year (say, from a raise), enter it here. If you always contribute the same amount, leave it at 0.
  7. Look at the result: The "crossover year" is when the market overtakes what you've put in. The multiplier shows how many times each dollar grows. Market gains are the money that didn't come from your pocket.

Frequently asked questions about this calculator

Why does the crossover year get later if I increase the annual increase?

Because raising your contribution each year means you keep putting in more of your own money, so your share of the pie grows more slowly than it would take the market to overtake it. That's not bad news: the final balance is larger in absolute dollars, it just takes longer for the "market's share" to pass yours.

What return should I use — the 6% default?

No figure is a prediction. Use the three scenarios (pessimistic, moderate, optimistic) to see the same plan under different assumptions, instead of staking everything on a single number that probably won't play out exactly.

Does this include taxes?

No. This calculator shows how the investment grows while it stays invested. Taxes only come into play when you sell or transfer the funds.

Why compare against leaving it in the bank at 1%?

It's a deliberately conservative stand-in for an interest-bearing account, with no fees or specific terms — it's not a real offer from any bank. The point is visual: to see, on the same chart, the gap between investing and leaving the money sitting idle.