How does the Compound Growth Simulator work?

Simulates how your investments grow over time with compound interest, monthly contributions, and optional yearly lump sums. Shows milestone tracking and dividend income projections.

How do I use the Compound Growth Simulator?

Set your starting investment, monthly contribution, and expected return rate using the sliders. The chart updates in real time showing year-by-year growth. Adjust the dividend yield to see projected passive income. Advanced Options adds inflation and the two fees that quietly reduce your return: fund expense ratio and advisory fee.

What are the key concepts behind the Compound Growth Simulator?

Compound growth means your returns earn returns. A 10% annual return doesn't just add 10% of your original investment — it adds 10% of your growing balance. This is why starting early matters so much. The same compounding works against you on fees: a percentage charged on your whole balance every year removes money that would otherwise have kept growing, which is why a 1% fee typically costs far more than 1% of the final result.

Today's dollars vs future dollars

Balances are shown in today's purchasing power by default, because a seven-figure number forty years out doesn't buy what it appears to. The toggle above the results switches to future (nominal) dollars, and every figure on the page — headline, chart, snapshots, table — switches together. The return slider stays a nominal rate with inflation as its own input, so you can see the gap instead of having it baked in.

What tips help me get the most out of the Compound Growth Simulator?

The S&P 500 has historically returned ~10% per year before inflation. Use 7-8% for conservative estimates. The lump sum field is great for modeling annual bonuses or tax refunds. If you pay an advisor, set the advisory fee to their rate and read the fee-drag number — it's the same fact as '1% per year' stated in dollars you'll actually miss.

Free Tool

Compound Growth Simulator

See how your investments grow over 40 years with compound interest, monthly contributions, and dividend projections.

Initial Investment$10,000

The amount you're starting with today

Monthly Contribution$1,000

How much you invest every month

Yearly Lump Sum (March)$2,000

A one-time annual investment, like a tax refund or bonus

Annual Return %10%

Expected yearly investment return. S&P 500 averages ~10%

Dividend Yield %4%

Annual dividend income as % of portfolio value

Dividend Income Target$60,000

Your target annual dividend income

Inflation %2.5%

Used to show what your balance is worth in today's dollars. Long-run US average is roughly 2–3%.

Expense Ratio %0.03%

What your funds charge annually. Broad index funds run about 0.03%; actively managed funds often exceed 0.50%.

Advisory Fee %0.00%

An advisor's annual fee on assets under management. The traditional figure is 1%. Set it to 0 if you manage your own money.

Showing today's dollars — adjusted for 2.5% inflation

§ Fee Drag

$27,460

That's what 0.03% in annual fees costs you over 40 years in today's dollars — 1% of what you would have had without them. Fees come out of your whole balance every year, so the cost compounds the same way your returns do. At 0.03% you're already near the cheapest end of what's available; this is roughly the floor, not a problem to fix.

Portfolio hits $1.00M in today’s dollars

27 years

You put in $199,199 — compound growth did 81% of the work

Dividends hit $60,000/year in today’s dollars

32 years

Portfolio: $1,579,135 x 4% = $63,165/yr

Year 10

$267K

Contributed: $150K

Growth: $117K

Dividends: $10,662/yr

($889/mo)

Year 20

$959K

Contributed: $290K

Growth: $669K

Dividends: $38,360/yr

($3,197/mo)

Year 30

$2.83M

Contributed: $430K

Growth: $2.40M

Dividends: $113,115/yr

($9,426/mo)

Year-by-Year Growth

ContributedCompound GrowthAnnual Dividends

$25K$1.0K

$41K$1.6K

$58K$2.3K

$76K$3.0K

$95K$3.8K

$115K$4.6K

$136K$5.4K

$159K$6.3K

$183K$7.3K

$208K$8.3K

$236K$9.4K

$265K$11K

$296K$12K

$329K$13K

$365K$15K

$403K$16K

$444K$18K

$488K$20K

$535K$21K

$585K$23K

$639K$26K

$697K$28K

$760K$30K

$827K$33K

$899K$36K

$976K$39K

★ $1.00M

$1.06M$42K

$1.15M$46K

$1.24M$50K

$1.35M$54K

$1.46M$58K

★ $60K DIV

$1.58M$63K

$1.71M$68K

$1.85M$74K

$2.00M$80K

Year-by-Year Growth
Label	Contributed	Compound Growth
1	23,415	1,719
2	36,169	4,921
3	48,287	9,652
4	59,793	15,968
5	70,708	23,929
6	81,056	33,603
7	90,857	45,064
8	100,131	58,397
9	108,899	73,692
10	117,180	91,051
11	124,992	110,584
12	132,353	132,411
13	139,281	156,666
14	145,792	183,492
15	151,902	213,046
16	157,628	245,500
17	162,984	281,038
18	167,985	319,863
19	172,646	362,193
20	176,979	408,264
21	180,997	458,335
22	184,715	512,682
23	188,143	571,606
24	191,295	635,433
25	194,181	704,515
26	196,812	779,232
27	199,199	859,994
28	201,353	947,245
29	203,283	1,041,464
30	204,999	1,143,168
31	206,511	1,252,915
32	207,827	1,371,308
33	208,956	1,498,996
34	209,906	1,636,681
35	210,686	1,785,118

Your Numbers

$1,000/mo + $2,000 every March at 10% returns. In 20 years you'll have $958,988 — throwing off $38,360/yr ($3,197/mo) in dividends at 4% yield. You'll have contributed $290,000 — meaning $668,988 came purely from compound growth.

stwlth.com

Historical S&P 500 average ~10%/yr before inflation. Returns not guaranteed. Balances default to today's dollars — the toggle above switches to future (nominal) dollars, and the year table exports both. Fees are modelled as a reduction of the annual return rather than a charge on the daily balance. Dividend yield varies by portfolio strategy; dividend taxes are not modelled.