Do you dream of enjoying your well-deserved retirement full of luxury and financial freedom? With the power of compounding or returns, periodic investments can grow exponentially to gigantic amounts over a long period of time. These are small steps at first, but over time the snowball effect begins to pay off. How much would you have to invest every day to become a millionaire by the age of 65?
Composite effect
Before we delve deeper into the results, it is important to thoroughly understand the compound effect mentioned earlier.
This refers to the phenomenon that the return you earn as an investor increases exponentially over time. If you add the profit achieved to the amount invested, the return will always be higher in absolute terms.
Albert Einstein himself called the compound effect the eighth wonder of the world.
Invest daily
In the table below you can see how much you would have to invest every day to accumulate a fortune of 1 million euros by the age of 65. The influencing factors are logically the entry age and the annual return.
| Old | 2 percent return | 3 percent return | 5 percent return | 7 percent return |
| 20 Euros | 38 euros | 29 euros | 15 euro | 9 euros |
| 25 euros | 45 euros | 35 euros | 21 euros | 12 euros |
| 30 euro | 54 euros | 44 euros | 29 euros | 18 euros |
| 35 euros | 67 euros | 56 euros | 39 euros | 27 euros |
| 40 euros | 86 euros | 74 euros | 55 euros | 40 euros |
| 45 euros | 112 euros | 100 euros | 80 euro | 63 euros |
| 50 Euros | 158 euros | 145 euros | 123 euros | 103 euros |
| 55 euros | 250 euro | 235 euros | 211 euros | 189 euros |
At first glance, setting aside a portion of these amounts every day seems like a no-brainer. However, on a monthly basis, the amount can add up quickly.
In the table below you can see how much you would have to invest each month to reach your target million by the age of 65.
| Old | 2 percent return | 3 percent return | 5 percent return | 7 percent return |
| 20 Euros | 1,156 euros | 882 euros | 487 euros | 274 euros |
| 25 euros | 1,369 euros | 1,065 euros | 639 euros | 365 euros |
| 30 euro | 1,643 euros | 1,338 euros | 882 euros | 548 euros |
| 35 euros | 2,038 euros | 1,703 euros | 1,186 euros | 821 euros |
| 40 euros | 2,616 euros | 2,251 euros | 1,673 euros | 1,217 euros |
| 45 euros | 3,407 euros | 3,042 euros | 2,433 euros | 1,916 euros |
| 50 Euros | 4,806 euros | 4,410 euros | 3,741 euros | 3,133 euros |
| 55 euros | 7,604 euros | 7,148 euros | 6,418 euros | 5,749 euros |
The compound effect becomes quickly visible through these tables. The earlier you start investing, the “easier” it will be.
However, for many, patience will be a major obstacle. Even in the crypto world, many strive to discover a small altcoin that can multiply their minimum investment by a hundred times.
However, in the long run, it doesn’t have to be that exciting, and regular investments in big names like Bitcoin (BTC) or Ethereum (ETH) can be a smart choice. However, it remains uncertain what the crypto industry will look like in a few decades.