- What is a good return on investment?
- Historically, the U.S. stock market (S&P 500) has returned about 10% per year before inflation, or about 7% after inflation. Bonds return around 4–5%, while high-yield savings and CDs typically return 3–5% in a normal rate environment.
- How much will $10,000 be worth in 20 years at 7%?
- $10,000 invested at 7% compounded monthly for 20 years grows to $40,389.40 — about a 4× return. Adding $300 per month over the same period brings the final balance to roughly $191,000.
- How do I calculate investment growth with monthly contributions?
- Use FV = P × (1+r)^t + PMT × [((1+r)^t − 1) / r], with r as the monthly return (annual ÷ 12) and t as the number of months. Spreadsheet apps also have a FV(rate, nper, pmt, pv) function for this.
- Does investment income get taxed?
- In taxable brokerage accounts, yes — long-term capital gains (held over one year) are taxed at 0%, 15%, or 20% depending on income, while short-term gains are taxed as ordinary income. Tax-advantaged accounts like IRAs and 401(k)s defer or eliminate this tax.