Discover how your monthly investments can grow over time through the power of compound interest.
This chart compares three investment return scenarios using your starting investment and monthly contribution amounts over your selected time horizon.
Inflation reduces the purchasing power of your future wealth. Adjust the assumed inflation rate to see how much your portfolio will be worth in today's dollars.
Canadians have several account options for long-term investing. Each has different tax treatment, contribution rules and flexibility.
Compound interest is one of the most powerful forces in personal finance. It is the growth you earn not only on your original investment, but also on the growth that investment has already generated.
The earlier you begin investing, the more time your money has to compound. Even small contributions made decades in advance can grow into substantial sums because each year's growth builds on the previous year's balance.
Regular monthly contributions create a disciplined savings habit and reduce the impact of market volatility. This approach, often called dollar-cost averaging, means you buy more units when prices are lower and fewer when prices are higher.
Small differences in annual returns can lead to large differences in portfolio value over long periods. A higher expected return can help you reach your goal sooner or reduce the amount you need to contribute each month.
Diversification spreads your investments across different asset types, sectors and regions. It helps reduce the risk that a single poor-performing investment will seriously damage your portfolio.
The calculator uses a fixed annual return for illustration. In reality, investment returns vary from year to year. Some years will be positive, others negative. Long-term average returns are not guaranteed and past performance does not predict future results.
A person invests CAD $1,500 every month for 32 years, starting with CAD $5,000, at an assumed annual return of 7%.
This is an illustration, not a guaranteed investment outcome. Actual results will depend on market performance, fees, taxes and other factors.
The monthly amount depends on your starting investment, expected annual return and time horizon. Use the calculator above to see the required monthly investment for your goal. Starting earlier and earning a higher return generally means you need to contribute less each month.
The time required depends on how much you invest and your expected return. For example, investing CAD $1,500 per month at a 7% annual return can reach approximately CAD $1 million in about 25 to 27 years. Investing more per month or earning a higher return can shorten this timeline.
Compound interest is the growth earned on both your original investment and the growth that has already accumulated. Over time, this creates exponential growth because each period's growth is calculated on an increasingly larger balance.
A common long-term average for a globally diversified portfolio of stocks and bonds is around 5% to 8% before inflation and fees. Higher returns are possible but come with more risk. Your actual return will vary year to year and is not guaranteed.
Yes, it is possible. Investing CAD $500 per month at a 7% annual return for about 35 years can grow to roughly CAD $1 million. The key factors are consistency, time and the actual return you achieve.
Neither is universally better. TFSAs are often preferred by lower-income earners or those who expect to be in a higher tax bracket in retirement. RRSPs may benefit higher-income earners who expect to be in a lower tax bracket when they withdraw. Many Canadians use both. Learn more in our TFSA vs. RRSP guide.
Inflation reduces purchasing power over time. A 7% nominal return with 2.5% inflation gives a real return of about 4.5%. The inflation adjustment in this calculator shows your future portfolio value in both nominal dollars and today's purchasing power.
No. The calculator results are estimates based on the inputs you provide and assume consistent returns. Real investment returns fluctuate, fees and taxes are not included, and future inflation is unknown. Use this tool for education and planning, not as a guarantee of future performance.