Hi All – In march last year I discovered the power of compound interest and how most average people could comfortably retire being a millionaire by the time they retire. Now I appreciate that for quite a few people investing £300 a month may not be possible, especially early on in their career… but as you get older and you get more experience it becomes progressively easier and you can actually save much more.
The S&P 500 Index originally began in 1926 as the "composite index" comprised of only 90 stocks. According to historical records, the average annual return since its inception in 1926 through 2018 is approximately 10%–11%.
I used 8% as the return for the calculation to factor in the cost of inflation.
If you do decide to invest, remember to do it through your Trading 212 Tax-Free Independent Savings Account (ISA) as that will mean your money will not be taxed.
If you want to get a free stock share worth up to £100 create a Trading 212 Invest account and use promo code or the link below: GbfXJeOl
Then once you open the account you can search for the Vanguard S&P 500 index fund (ticker symbol: VUAG).
Also, below is the website that I used to calculate compound interest for you so feel free to run your own calculations too if you'd prefer:
To re-cap £300 invested over 40 years (at 8% return) means that you will invest 144,000 of your own money over that time period and the remaining 903,302.35 will be generated by the compound interest itself giving you a grand total of 1,047,302!!!
Finally, remember that investing is long term so you should ideally want to keep the money invested for at least 5 years or more.
Money needs time to grow so the quicker you can start, the easier it will be for you to retire!
Good luck and happy investing!