Invest $1,000 per month in the market for 30 years. How much can you earn?

Many people think investing is complicated, but the simplest and most straightforward approach often yields the best results.

Suppose you invest $1,000 monthly into the S&P 500 index fund and stick with it for 30 years without wavering. What will happen?

Numbers Speak for Themselves

Assuming an average annual return of 9.5% (which is actually a conservative estimate; historically, it’s around 10.2%), plus dividend reinvestment:

• 5 years: Invested $60k → Account balance $72.5K
• 10 years: Invested $120k → Account balance $186.7K
• 15 years: Invested $180k → Account balance $366.5K
• 20 years: Invested $240k → Account balance $649.5K
• 30 years: Invested $360k → Account balance $1.8M

You see the math, right? Investing $36,000 turns into $180,000. The key is time and patience.

How Comfortable Can Dividend Income Make You?

If after 30 years, your account holds $1.8 million, can you live off the dividends?

Currently, the S&P 500 dividend yield is only 1.2% (lowered by tech giants that rarely pay dividends). That amounts to an annual income of just $21.6K.

But the median historical dividend yield is 2.9%. Based on that, $1.8 million could generate $52K in passive income annually — enough for many to live a semi-retired life.

Key Takeaways

You don’t need to be a stock analysis expert, nor chase after the latest hot stocks. Just invest once a month, and let compound interest do the work. Warren Buffett once said, “You don’t have to do anything special to get extraordinary results.” The S&P 500 is exactly that kind of thing.

(Of course, when you reach retirement age, you’ll need to gradually adjust your asset allocation, adding more stable tools like bonds.)