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How much money do I need to invest to reach my goal of $100,000 in 20years investor.gov calculator
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Auto-generated transcript. Not time-synced to the video.
So, one of the most common questions
I've been getting is, "How much do I
need to invest in order to reach my
goals? Do I need to put in more in the
beginning? Do I need to put in more
every month? What's the best formula?"
So, the answer is the best formula is
depends on your expenses of your life.
Do you have more money in the beginning
put away to be able to put into a fund
or do you have more money on a monthly
base? So I found a website that gives a
very clear good savings goal calculator.
It's
investor.gov. I n s o
r.gov investor.gov. They have beautiful
calculators over here. Beautiful tools
that you can see for yourself. All of a
research stuff about investing and about
putting away for college, putting away
for retirement, putting away for your
savings goals. So, if you hover with
your mouse on the top bar, you see
financials right over here on the top,
financial tool and calculator. Just
hover, don't click. Move down with your
mouse all the way to savings goal
calculator. Click on that and let's
start. We have a goal savings of let's
say $100,000. We want to reach
$100,000. And then initial investment,
we will put zero. And then years to
grow, we have 20 years. Kid is born, you
want to, let's say, put away for his
wedding. In 20 years from now, you want
to have $100,000 to marry off your
child. You put in zero investments. I
don't have any money now to put down.
And we have years to grow 20. And then
we're going to put estimate rate of 10%
as the S&P 500 did an average of 10% in
the past 20 30 years. Do annual, no,
monthly or manual doesn't make a big
difference. And then hit calculate. Once
you hit calculate, it's going to
populate exactly if you contribute
$131.69 every month over the next 20
years towards your goal, you will have
$100,000 in savings. Then you can move
down, see the chart. It shows you a very
clear chart how it works. You can click
on show table and it's going to show you
how it works. Year number one, year
number two, all the years. By the end,
you'll scroll down. You'll see your
contribution was
$33,000 and you have a total of
$100,000.
Now, what is if I have a six-year-old or
an 8-year-old and I want to know, do I
need to put down anything in the
beginning? What should I do? So, if you
have, let's say, the same goal of
$100,000 and you have a six-year-old, so
we need $2,000 per year that you missed.
Let's put in $12,000 because he's six
years old now. So, we're putting in
$12,000 as the initial investment. We
only have 14 years to go. as year six to
reach the 20 is only 14 years. Calculate
you will still need $141 per month to
reach the goal and you put in $12,000 in
the beginning. And the same as with all
your other kids, you can calculate by
the age, put $2,000 per year for the
beginning. So if the kid is only three,
put $6,000. If the kid is eight, put
$16,000.
Same kid. If you don't have the $12,000
and you only want to put in zero in the
beginning and you hit calculate, instead
of 141, you will get up to
$274 a month. So, it depends in your
financials. It depends how much money
you have to put down at the beginning.
The more you put down in the beginning,
the less you have to do on a monthly
base. Now, let's look at a reverse how
to do a compound interest calculator. On
the left side over here, you'll see
compound interest calculator. And you
can go the reverse way. Let's say we
have an initial investment of
$5,000 and then you're going to do a
monthly contribution of $100 and you
want to know how much is going to be in
20 years from now. So let's put over
here 20 and you do interest rate as a
10% again monthly and hit calculate. By
the end you will end up having
$112,000. This is how you can calculate.
This is a beautiful website where you
can calculate all your needs. what you
need, how much to invest, and how much
to start off, and what to do your
monthly additions. Thank you for
watching.