How to Turn $10K Into $100K in 30 Years

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We crunched the numbers on buying stocks, earning ROI, and making money grow for 30 years. Read on to see how to increase your cash tenfold. [[{“value”:”

When you’re first getting started with investing, it might feel as if the future is impossibly far away, and the numbers you need to retire are too big to reach. But if you buy stocks and invest in a diversified portfolio for many years, the numbers in your brokerage account will tend to go up.

What if you have $10,000 of savings, and want to make that money grow to $100,000? What do you have to do? Very little. If you use any of these simple investment strategies to invest $10,000 for 30 years, you’re likely to turn $10,000 into $100,000 without too much effort.

Let’s look at three easy strategies for how to invest $10,000 for maximum long-term growth — and which investment accounts can make it happen for you.

1. Open an IRA or brokerage account and invest in index funds

Let’s say you already have $10,000 of cash in the bank, or in your 401(k) plan at work, or in an individual retirement account (IRA) or brokerage account. If you want your cash to grow to $100,000, you can’t just leave it in the bank or keep it invested in CDs or cash equivalents. You must invest your money in financial assets like stocks and bonds.

Good news: it’s easier than ever before to invest $10,000 for 30 years of long-term growth potential. You don’t have to pick stocks, day trade, or buy alternative assets or obscure, risky investments. Instead, you can grow your money just by investing in diversified index funds of stocks and bonds.

The stock market might go up or down on any given day, and it might endure longer-term drawdowns that last for months or years. But most of the time, over the long run, the stock market tends to go up. The S&P 500 index has delivered compound average annual growth of 10.7% for the past 30 years.

If you start with $10,000 and earn 10.7% average annual returns per year for the next 30 years, your $10,000 of investments would grow to $211,011.

2. Use the best robo-advisors to invest automatically

What if you don’t know how to pick the right index funds and ETFs, or want some help to invest your money? Robo-advisors can help you set up a diversified portfolio of investments based on your age, income, financial goals, and how much investment risk you’re willing to accept.

With a robo-advisor, you can automatically invest your money for the long term, get automated rebalancing of your portfolio, and lean on other special perks and help. If you have $10,000 and want it to grow to $100,000, the best robo-advisors can give you a low-stress, low-effort path to success.

For example, let’s say that you’re not super aggressive about taking risks with your investments — you don’t want to lose 50% (or more) of your portfolio’s balance in case of a stock market crash. Robo-advisors can help you invest in a balanced portfolio of stocks and bonds that might not earn as high of an ROI as the S&P 500 index, but could protect you from risks.

What if you “only” earn 8% per year for the next 30 years? If you start with $10,000 and earn about 8% per year, after 30 years you’d have $100,626.

3. Put $10,000 of cash in a savings account and add to it

What if you don’t want to invest your cash in stocks, and you just want a big emergency savings fund? If you start with $10,000 of cash in the bank, it actually is possible to grow that money to $100,000 in 30 years — but you’ll need to keep adding to your savings account balance, and you’ll need to earn a decent APY.

Let’s say you start with $10,000 in your savings account, and you earn 3.00% APY per year for the next 30 years. (That high savings account APY is not guaranteed; interest rates change, and savings account APYs can be higher or lower based on the bank’s decisions and overall Federal Reserve interest rate policy.)

If you can earn 3.00% APY on your savings account for the next 30 years, and you save an additional $132.64 per month, after 30 years, your savings account will have $100,000 in it.

But here’s the problem: Leaving too much money in cash for too long can cause you to miss out on earning a lot more money by investing in stocks. If you start with $10,000 in an IRA or brokerage account, and invest an extra $132.64 per month for 30 years, and earn 8% per year in investment returns, you would have $280,067. That’s an extra $180,000 over 30 years that you could earn from investing in stocks and bonds, instead of keeping your cash in a high-yield savings account.

Bottom line

If you have a long time horizon to leave your money invested, you have plenty of time to grow your cash in the stock market. Even if the stock market goes through a near-term downturn, stock prices tend to go up in the long run, as companies innovate, earn profits, pay dividends, and attract new investment. $10,000 invested today could easily grow to $100,000 in the next 30 years.

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