Here’s How Much A $10,000 Brokerage Account Could Grow By 2050

Many people hesitate to invest in stocks or index funds in a brokerage account simply because they see it as a risky thing to do with their money. And if we’re talking about a period of a few months or even a few years, there’s a strong argument to be made that it’s true.

On the other hand, you might be surprised at how predictable stock market performance can be over multi-decade time periods. Although there is no way to know exact what will happen in the next 10, 20 or 30 years, we can certainly use history as a guide. With that in mind, here’s how much a $10,000 investment in a core S&P 500 index fund could grow by the middle of this century.

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Historical stock performance

The S&P 500 is widely considered to be the best overall indicator of the performance of the US stock market. And in short periods, it can be quite volatile. Since 1965, the S&P 500 has gained as much as 37.6% or lost as much as 37% in a single year. In the Great Recession of 2007-2009, the index lost more than 50% of its value before bottoming out.

However, over the long term, S&P 500 returns are surprisingly predictable. The exact performance depends on the particular time period you’re looking at, but over most multi-decade periods, the S&P 500 has returned about 10% on an annual basis. Using the period “since 1965” as an example, the S&P 500 returned an average of 10.2% per year from 1965 to the end of 2023.

How much could $10,000 grow to by 2050?

For simplicity, let’s assume that the S&P 500 produced an annual return of 10% for the next several decades. Of course, in some years the returns will be higher and in others they will be (much) lower, but we are talking about the long-term average.

Since it’s almost 2025, we’ll use a period of 25 years to 2050. So if we take a $10,000 investment and compound it at a 10% annualized return over a 25-year time frame, you’ll end up with more than $108,000.

Again, this is simply based on historical performance, which is no guarantee of future results. In other words, the real rate of return on the S&P 500 between now and 2025 is not likely to be exact 10% when annualized. But the point is that over long periods of time, the stock market has the ability to turn relatively small investments into much larger amounts of money.

Take it a step further

Of course, that could happen if you made one once Invest $10,000 in an S&P 500 index fund through a broker or investment app and just leave it alone.

Now imagine if you did this, but also added a few thousand dollars each year to your investment and let it compound over time. If you invested $10,000 in an S&P 500 index fund today and added $500 per month to your investment through 2050, you’d end up with a nest egg of nearly $700,000 based on a 10% annual rate of return.

If you’ve ever heard someone say that over time the stock market outperforms all other major asset classes, it’s true. It’s not likely to grow in a straight line over time, but if you invest consistently and allow a long period of time for your investments to grow, it’s extremely likely that you’ll end up with a lot more money than you started with.