Here’s What Happens When You Invest $50 a Month for 40 Years

Investing money is a great way to grow wealth. The problem, though, is that if you don’t have money you aren’t spending on bills, then you can’t get started. If you currently bring home $3,000 a month, but every single dollar of that $3,000 is earmarked for expenses, then investing isn’t going to happen for you.

But what if you were to tweak your spending ever so slightly so as to free up $50 a month? You might assume that a sum that small won’t really do you much good. But actually, you may be surprised at how much wealth you can accumulate over time if you commit to investing $50 a month for a 40-year period.

Small contributions can go a long way

Whether you’re investing in a taxable brokerage account or an individual retirement account (IRA) for retirement, time is really your greatest asset. Sure, it helps to invest as much money as you can. But if you give yourself a lengthy window of time to invest, you might do quite well for yourself even if you’re not investing so much money on a monthly basis.

So, let’s say $50 a month is all you can swing in your brokerage account or IRA not just at present, but over time. The stock market has, over the past 50 years, delivered an average return of 10%, as measured by the performance of the S&P 500 index. So, let’s say you load up on stocks and manage to generate that same return. If you invest $50 over 40 years at 10%, you’ll end up with around $265,000.

That’s certainly a nice amount of money. In fact, a recent study by Northwestern Mutual found that the average American has $89,300 saved for retirement. In our example, investing $50 a month over 40 years leaves you with about three times that amount.

It’s also worth noting that investing $50 a month means parting with $600 a year. Over 40 years, that’s $24,000. So based on the number above, you’d be looking at a $241,000 gain.

Ways to carve out $50 a month

At this point, you may be motivated to invest $50 a month, but you may be unsure as to how you’re going to find the money. Your first step there should be to do a deep dive into your spending and see exactly where your money goes month after month. Canceling one streaming service and skipping one takeout meal a month (not per week!) could free up $50, depending on what those things cost you.

Another option, of course, is to try to boost your income with a side hustle. Going that route might actually give you well more than $50 to invest with on a monthly basis. But if you don’t want to commit to a lot of side work, you may be able to do something like drive for a ride-hailing service a few hours a week to come up with the cash.

You might assume that to amass a nice amount of wealth, you need to invest a ton of money. But clearly, a $50 monthly commitment could do a lot of great things for your finances. And if you’re able to invest beyond that point, even better.

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