Watch Your Investment Outgrow Deposits!

Avatar of u/FinEducation
u/FinEducation · Joined Oct 2024

This chart reveals the power of compounding, showing when investment returns start outpacing your contributions. Watch your money work harder over time!

Last update Oct 2024
  • Scenario 1: Investment Growth Potential
  • Scenario 2: Cumulative Deposits Over Time
  • Which One Is Higher (%)

This chart compares your Investment Growth Potential (with compounding interest) and Total Deposits. The dotted line shows which scenario is higher as a percentage. Notice how compounding accelerates growth beyond deposits over time!

# Years from Now

Try your numbers:

Enter the amount you plan to invest as your starting balance. This forms the foundation for growth over time.

A =

Enter the amount you'll add every month to boost your investment. Consistent contributions amplify growth through compounding.

B =
Confirm Delete

Are you sure you want to delete ": "?

Add Input
  • Amount
    Any single amount ($).
  • Cash Flow
    Rent, insurance premium, salary, ...
  • Current Asset
    Real estate, commodity, bonds, ...
  • Installment Loan
    Mortgage, car loan, ...
  • Percentage
    Any percentage value (%).
  • Years / Months
    Any time horizon.
  • Age
    Show "Age" instead of "# Years from Now."
  • Retirement Age (requires Age)
    Enable "Investment Return After Retirement."

Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

Scroll up to view updated chart.

Not exactly what you want?

How is Cash Value calculated?

This calculates the future value of your starting balance and monthly contributions, compounded over time. As interest adds to each balance, growth accelerates, showing the impact of steady contributions and compounding on your returns.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

C̃ =
D̃ =
Now
∞

Calculations

(Expressions are evaluated at every year.)

Ẽ =
Confirm Delete

Are you sure you want to delete ": "?

Add Decision or Expectation
  • Buy Asset
    Buy an asset growing at its own rate.
  • Take Installment Loan
    Take a mortgage, loan, etc.
  • Invest
    Receive/Spend a lump sum.
  • Expect to Invest
    Expect to receive/spend a lump sum.
  • Expect Monthly Cash Flow
    Expect to receive/spend cash monthly.
  • Expect Yearly Cash Flow
    Expect to receive/spend cash yearly.
  • Define Variable (Numerical)
    Calculate an intermediate value.
Add Intermediate Calculation
  • Define Variable (Numerical)
    Calculate an intermediate value.
  • Define Variable (Cash Flow)
    Calculate a combined cash flow.