Investing in the financial markets is one of the simplest ways to multiply your savings. To earn even large amounts you do not need to have large capital, even a small monthly savings for a long period can yield large sums. It is truly unimaginable what happens by investing 100 euros per month at 10% instead of leaving them in the current account.
The beginning of the year could be an opportunity to start saving and investing in the financial markets. The stock exchanges have made a lot in the last year. For example, the saver who had invested in our Ftse Mib index at the beginning of the year would have gained 23%. If he had invested in the Unicredit stock he would have increased his capital by over 70%.
Unimaginable what happens by investing 100 euros per month at 10% instead of leaving them in the current account
Most savers prefer to leave their money in the account without investing it in the markets for two reasons. The first reason is the lack of knowledge of the financial markets and therefore not knowing where to invest money. The second reason is the lack of starting capital. These savers are convinced that 100 euros a month is such a small amount that it is not worth investing.
Sometimes even 100 euros a month is not easy to put aside. However, it is not too difficult to save this amount even for those who do not have fabulous salaries. Here is a tip on how to accumulate € 10,000 starting from scratch in 64 months with croissants and cigarettes.
Let’s find out what happens to a saver who decides to invest only 100 euros a month on the stock markets. One of the simplest solutions is to make an accumulation plan on an ETF. In practice, every beginning of the month the saver invests 100 euros in the chosen Exchange Trade Fund. Let’s also assume that on average this ETF can yield 10% per year. Let’s see with this investment strategy how much it is possible to accumulate in 5, 10, 20 and 30 years.
Transforming 100 euros per month into 228 thousand euros
The saver who invests 100 euros per month with an annual yield of 10%, after 5 years will have accumulated a capital of approximately 7,000 euros, of which 1,800 in interest. If the saver continues to invest for 10 years, at the end of the period he will have accumulated over € 20,000, of which approximately € 8,600 in interest.
The figure becomes very interesting if the investment is continued for 20 years. At the end of this period, the capital will be over € 76,000, of which over € 52,000 in interest. What if the saver continues investing for 30 years? Then the capital would become 228,000 euros, of which 191,000 euros of interest.
These figures are obtained with a yield of 10% per year. It may seem like a risky hypothesis but it is not. We have seen how our stock market has risen by 23% this year. There are indices, such as the S & P500 USA which has gained an average of 10% per year over the past 20 years. The Vanguard S&P 500 ETF (Isin: IE00B3XXRP09) in the last 10 years it has had an average yield of 15% per year. So it is not so unlikely that it will maintain this average over the next 30 years.
Deepening
To earn 100,000 euros, how much to invest in this exceptional tool and for how long?
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