Got $100 Per Month to Invest? Here's How Far It Could Go in the Stock Market | The Motley Fool (2024)

FAQs

Got $100 Per Month to Invest? Here's How Far It Could Go in the Stock Market | The Motley Fool? ›

If you're still investing $100 per month, you'd have a total of around $518,000 after 35 years, compared to $325,000 in that time period with a 10% return. There are never any guarantees in the stock market, but with the right strategy, a little cash can go a long way.

Since launching in 2002, the Motley Fool Stock Advisor has delivered an average stock return of 644%*, significantly outperforming the S&P 500's 149% return in the same timeframe.

Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.

If you were to invest in a company offering a 4% annual dividend yield, you would need to invest about $900,000 to generate a monthly income of $3000. While this might seem like a hefty sum, remember that this investment isn't just generating income—it's also likely to appreciate over time.

For investors looking for stock ideas and actionable guidance, Motley Fool is likely worth the reasonable annual fees. The stock research alone can pay for the membership cost if you invest in just a couple successful picks. However, more advanced investors doing their own analysis may not find sufficient value-add.

The Motley Fool has positions in and recommends Alphabet, Amazon, Chewy, Fiverr International, Fortinet, Nvidia, PayPal, Salesforce, and Uber Technologies.

Estimates on the return on investment from having a financial advisor vary. In a 2019 whitepaper, Vanguard assessed an “Advisor's Alpha,” or the value that a financial advisor adds to a client's portfolio, to be about a 3% net return per year, depending on a client's circ*mstances and investments.

Rather than hitting it big with speculative investments, the real key is consistent investment from as early an age as possible. If you do that, investing just $100 per month may be enough to get you to a seven-digit retirement account.

Reinvest Your Payments

The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets. And that's okay.

How can I make $3,000 a month? ›

Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.

Some experts recommend withdrawing 4% each year from your retirement accounts. To generate $500 a month, you might need to build your investments to $150,000. Taking out 4% each year would amount to $6,000, which comes to $500 a month.

A report by mutual-fund company Vanguard found that advisors can potentially add 3% or more to a client's net investment returns by picking cost-effective investments, behavioral coaching and more. But individual financial advice from a trained expert isn't something to purchase lightly.

Motley Fool Success Rate

As you can see above, the Motley Fool's Stock Advisor's success rate over the last 5 years is 84%. That means 101 of their last 120 stock picks are up. Most impressively, 57 of those 120 stock picks have at least doubled and 34 have actually tripled.

Stock Market Average Yearly Return for the Last 5 Years

The historical average yearly return of the S&P 500 is 14.53% over the last 5 years, as of the end of February 2024.

General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.