How much money will you have if you invest 1,000 CZK per month for 30 years?
Patience, perseverance and regularity. If these three factors are combined, the investor has a good chance of appreciating the money decently, even if he invests only a few hundred crowns a month. How rich will your portfolio be in 30 years if you invest 1,000 CZK each month?
(This article is NOT investment advice)
No one knows what the world will look like in three decades because the future is uncertain. But by investing regularly, one can at least partially prepare for it. The longer you value your finances, the better, because with a long investment horizon The strength of compound interest also increaseswhich is the alpha and omega of long-term investing.
Compound interest is, in simple terms, the interest on the original deposit and at the same time the money already accrued. If the investor invests CZK 1,000 for the first year with interest of 10% p.a., he will have CZK 1,100 after the end of the investment. When he reinvests this money in an investment with interest of 10% p.a., he does not earn another CZK 100, but already CZK 115 (because the interest amount is now CZK 1,100). After two years, he will have a total of CZK 1,215. Read more about compound interest in the article hereunder.
As you read investment books and manuals, you will learn that long-term investing is statistically the most successful. How much exactly does it cost, we will show you this on specific examples below.
A thousand a month will do wonders in 30 years
In general, the longer and the larger the amount you invest each month, the better. However, we will see the effect of long-term investing at a relatively low investment of CZK 1,000 per month.
Let's use the fictional character Thomas as an example. He is now 35 years old and wants to invest responsibly in order to save enough for retirement. He knows he can postpone his paycheck every time 1 000 CZK and that he wants to do so until he is 65 years old. Thomas's investment horizon is 30 years. Invest in a financial product with fixed income 10% annually (this yield approximately corresponds to the long-term returns of investors on Investown).
If Tomáš does not relent and really invests CZK 1,000 every month in an investment with a fixed interest rate of 10% p.a., in 30 years he will have 2,279,325 CZK. At the same time, its total deposit for the investment period is only 360 thousand CZK, the remainder (CZK 1,919,325) will be earned on interest.
Compound interest and disciplined investing are behind success. The fixed return on investment also plays a big role — if Tomáš bet on an investment product with a variable return (such as stocks or cryptocurrencies) that would yield an average of less than 10% per year for 30 years, his total profit would be significantly lower.
A shorter investment horizon also makes sense
Regularly investing 1,000 CZK per month for 30 years is optimal, but some investors do not have this option. For example, because they only have a few years left to retire, or perhaps because they will be paying their mortgage for another 20 years.
Even so, it would be a shame to completely neglect long-term investing, it makes sense to appreciate money even after smaller amounts and for a shorter period of time. Maybe after 500 CZK monthly in the course of 10 years. If we again count on a fixed income of 10% p.a., the investor will start during this period 103 276 CZK, while the deposit is 60 thousand CZK, the rest is interest.
Although the return is not as high as in the case of a 30-year investment, the investor still has a good chance that beat inflation and thus protect the value of your money.
Did you know that at Investown you can invest in loans secured by real estate as little as CZK 500? You don't have to have millions of dollars in your account to start valuing your finances.
How to save 1000 CZK per month
“Investing 1,000 CZK month after month would be great, but where do I get that money every time? “sad line of beginning investors.
While for one person, saving a grand a month is easy as a slap in the face, for another it is something unimaginable. If you belong to the second category, you don't have to hang your head, because the path to change is often easy.
The easiest is limit residual spending, for example, daily going out for coffee or some entertainment. For example, setting a strict monthly limit works well: if you have a regular income, determine in advance how much you will spend each month on entertainment and other necessities, then you can invest the rest.
If the first time you fail to save the full 1,000 CZK, feel free to start with a smaller amount.
In addition to limiting residual expenses, saved money for energy or a partial increase in income (for example, an occasional brigade) can help you.
If the first time you fail to save the full 1,000 CZK, feel free to start with a smaller amount and try to increase it every month.
This article is not investment advice
Investown does not provide investment advice. This is an educational article with basic information about long-term investing. For specific advice, we recommend using the services of an investment advisor.
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