Investing Just a Dollar a Day Can Add Up to $37,000 Over 30 Years at 7%

Putting away just a dollar a day may not seem like much, but at a hypothetical 7% annual return, $30 a month could grow to roughly $37,000 over 30 years. If you automate the contribution in an investing app and increase it by 50 cents a day, or $15 a month, each January, the balance can keep building steadily.

Over that 30-year span, your total deposits would come to only $10,800, meaning about $26,000 of the ending balance would come from growth. In other words, the investment earnings would be more than twice your own contributions.

The Securities and Exchange Commission’s compound interest calculator at Investor.gov shows similar results for three daily savings amounts, assuming a 7% annual return with monthly compounding:

• $1 a day, or $30 a month, grows to about $5,000 in 10 years, $16,000 in 20 years, and $37,000 in 30 years.
• $3 a day, or $90 a month, grows to about $16,000, $47,000, and $110,000.
• $5 a day, or $150 a month, grows to about $26,000, $78,000, and $183,000.

At the $1-a-day level, the third decade adds roughly $21,000, which is more than the about $16,000 accumulated in the first two decades combined. That is why starting earlier can make such a big difference. Of course, returns vary from year to year and some years can produce losses, so these numbers should be treated as examples rather than guarantees.

Making the deposit automatic on a weekly or monthly schedule can help ensure it happens consistently. A $7 weekly contribution works out the same as $30 a month. It also helps to choose an investing app with no monthly fee, since a $3 monthly charge would eat up 10% of a $30 deposit.

From there, increase the contribution by 50 cents a day, or $15 a month, each January or whenever your income rises. Under the same hypothetical 7% return, someone who starts at $1 a day at age 25 would be investing $10.50 a day by age 44 without making one large leap. Over 20 years, those deposits would total $41,400 and would grow to about $72,000, compared with about $16,000 from $7,200 saved at a flat dollar a day.

Set up the first $30 deposit this week, then add a recurring January reminder to raise the amount by $15 a month.

Look for an account for those contributions among the best investing apps.

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