Investment Returns Calculator

How to Use This Investment Calculator

Enter your starting amount, expected annual return, and investment timeframe. Add regular contributions (weekly, monthly, or yearly) to see how consistent investing accelerates your wealth building. The calculator shows your final balance, total contributions, and investment growth broken down year by year.

The Power of Compound Interest

Albert Einstein allegedly called compound interest "the eighth wonder of the world." Whether he said it or not, the math is powerful. Unlike simple interest, which only earns returns on your original investment, compound interest earns returns on your accumulated gains—creating exponential growth over time.

Compound Interest Example

Consider $10,000 invested at 7% annual returns:

• After 10 years: $19,672 (almost doubled)
• After 20 years: $38,697 (nearly 4x)
• After 30 years: $76,123 (over 7.5x)
• After 40 years: $149,745 (nearly 15x)

Notice how most of the growth happens in the later years—that's compound interest in action. Time is your greatest asset when investing.

The Impact of Regular Contributions

Adding regular contributions dramatically accelerates wealth building. Investing $500 per month at 7% over 30 years grows to approximately $580,000—but you only contributed $180,000. The remaining $400,000 is compound growth. This is why consistent investing matters more than timing the market.

Historical Investment Returns in Australia

*Long-term historical averages. Past performance doesn't guarantee future results. Returns vary significantly year to year.

Investment Strategies for Australians

Dollar-Cost Averaging

Investing a fixed amount regularly (like $500/month) regardless of market conditions. When prices are high, you buy fewer units; when low, you buy more. This averages out your purchase price and removes the stress of trying to time the market.

Superannuation Contributions

Your super is one of the most tax-effective ways to invest in Australia. Contributions are taxed at just 15% (compared to your marginal rate), and investment earnings within super are also taxed at reduced rates. Consider salary sacrificing additional amounts to maximize this benefit.

Frequently Asked Questions

When should I start investing?

The best time to start investing was yesterday; the second best time is today. Due to compound interest, starting early makes an enormous difference. Someone who invests $300/month from age 25 to 65 at 7% will have about $760,000. Starting at 35 gives only $365,000—less than half, despite only missing 10 years of contributions.

Should I pay off debt or invest?

Generally, pay off high-interest debt (credit cards, personal loans) before investing. The guaranteed "return" from paying off 18% credit card debt beats any investment. For low-interest debt like mortgages, the answer is less clear and depends on your risk tolerance and tax situation.

How do I account for inflation?

To estimate future purchasing power, subtract inflation (historically 2-3% in Australia) from your expected return. If you expect 7% returns and 2.5% inflation, use 4.5% for a "real" return projection. This gives a more realistic picture of your future wealth.