Insights

Investing in the Stock Market Could Turn Your $1,000 Into $576,000. Here’s How.

The stock market can be intimidating at times, especially during periods of volatility. But it’s also a powerful wealth-generating machine.
Investing is one of the easiest, most effective ways to build long-term wealth, and you don’t need a lot of money to get started. Even if you’re starting with as little as $1,000, you can grow a portfolio worth more than $500,000 over time. Here’s how.
Image source: Getty Images.

Investing in the right places
You don’t need to know a lot about the stock market to get started investing. In fact, with some investments, you don’t need to know anything about researching companies or choosing stocks.
For many people, an S&P 500 index fund is a great place to get started. This type of investment tracks the S&P 500 index itself, which means it includes the same stocks as the index and mirrors its performance over time.
S&P 500 index funds require very little effort on your part, because you never need to worry about choosing individual stocks or deciding when to buy or sell. All you have to do is invest consistently, and the fund will do the rest of the work for you.
This type of investment is also a safe choice during periods of volatility. The S&P 500 itself has faced countless market downturns over the decades, and it’s managed to recover from all of them. No matter how long this current slump continues, it’s extremely likely the S&P 500 will recover eventually — and so will your investment.
How much can you earn with an S&P 500 index fund?
Perhaps the best part about an S&P 500 index fund is that although it’s one of the safest investments out there, it also packs a punch.
Historically, the index itself has earned an average rate of return of around 10% per year. This means that while you likely won’t earn 10% returns year after year, the highs and lows over time will average out to around 10% per year.
Say, for example, you were to invest $1,000 right now in an S&P 500 index fund. If you made no additional contributions and were earning a 10% average annual return, you’d have around $28,000 after 35 years.
The real magic happens when you start investing consistently. Say that along with your initial $1,000 investment, you also contribute $100 per month. Assuming you’re still earning a 10% average annual return, here’s approximately how much you’d accumulate over time:
Number of Years
Total Savings
20
$75,000
25
$129,000
30
$215,000
35
$353,000
40
$576,000
Data source: Investor.gov. Calculations by author.
The sky’s the limit in terms of how much you can earn with the stock market. The more you’re able to invest each month and the longer you let your money grow, the more you can earn.
Is it safe to invest right now?
The market is shaky right now, which can be daunting. However, market downturns can actually be one of the best opportunities to invest because prices are lower.
Even if you’re buying S&P 500 index funds rather than individual stocks, you’ll still pay less for your investments when stock prices are down. When the market inevitably recovers, you could see substantial gains. If you’re looking for a good time to start investing, downturns can be your best chance.
That said, it’s important to keep a long-term outlook when investing. There is a chance that the market will get worse before it gets better, and your investments could lose value in the short term. That’s normal. Try your best to stay focused on the future, and remember that no matter how far stock prices fall, the market will recover eventually.
Investing in the stock market can create life-changing wealth, but it’s important to have a strategy. By investing in the right places, contributing consistently, and keeping a long-term outlook, you could build a portfolio worth hundreds of thousands of dollars or more.
The Motley Fool has a disclosure policy. –

The stock market can be intimidating at times, especially during periods of volatility. But it’s also a powerful wealth-generating machine.

Investing is one of the easiest, most effective ways to build long-term wealth, and you don’t need a lot of money to get started. Even if you’re starting with as little as $1,000, you can grow a portfolio worth more than $500,000 over time. Here’s how.

Image source: Getty Images.

Investing in the right places

You don’t need to know a lot about the stock market to get started investing. In fact, with some investments, you don’t need to know anything about researching companies or choosing stocks.

For many people, an S&P 500 index fund is a great place to get started. This type of investment tracks the S&P 500 index itself, which means it includes the same stocks as the index and mirrors its performance over time.

S&P 500 index funds require very little effort on your part, because you never need to worry about choosing individual stocks or deciding when to buy or sell. All you have to do is invest consistently, and the fund will do the rest of the work for you.

This type of investment is also a safe choice during periods of volatility. The S&P 500 itself has faced countless market downturns over the decades, and it’s managed to recover from all of them. No matter how long this current slump continues, it’s extremely likely the S&P 500 will recover eventually — and so will your investment.

How much can you earn with an S&P 500 index fund?

Perhaps the best part about an S&P 500 index fund is that although it’s one of the safest investments out there, it also packs a punch.

Historically, the index itself has earned an average rate of return of around 10% per year. This means that while you likely won’t earn 10% returns year after year, the highs and lows over time will average out to around 10% per year.

Say, for example, you were to invest $1,000 right now in an S&P 500 index fund. If you made no additional contributions and were earning a 10% average annual return, you’d have around $28,000 after 35 years.

The real magic happens when you start investing consistently. Say that along with your initial $1,000 investment, you also contribute $100 per month. Assuming you’re still earning a 10% average annual return, here’s approximately how much you’d accumulate over time:

Number of Years
Total Savings
20
$75,000
25
$129,000
30
$215,000
35
$353,000
40
$576,000

Data source: Investor.gov. Calculations by author.

The sky’s the limit in terms of how much you can earn with the stock market. The more you’re able to invest each month and the longer you let your money grow, the more you can earn.

Is it safe to invest right now?

The market is shaky right now, which can be daunting. However, market downturns can actually be one of the best opportunities to invest because prices are lower.

Even if you’re buying S&P 500 index funds rather than individual stocks, you’ll still pay less for your investments when stock prices are down. When the market inevitably recovers, you could see substantial gains. If you’re looking for a good time to start investing, downturns can be your best chance.

That said, it’s important to keep a long-term outlook when investing. There is a chance that the market will get worse before it gets better, and your investments could lose value in the short term. That’s normal. Try your best to stay focused on the future, and remember that no matter how far stock prices fall, the market will recover eventually.

Investing in the stock market can create life-changing wealth, but it’s important to have a strategy. By investing in the right places, contributing consistently, and keeping a long-term outlook, you could build a portfolio worth hundreds of thousands of dollars or more.

The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info