If you're sitting the market out because, like a lot of people, you don't believe you have enough money to invest, I'm here to tell you that you're wrong. Most of us knew next to nothing about investing when we started taking advantage of compound interest, but we learned a little at a time. And the longer we stuck with it, the more confident we became. All that to say, where you are and what you're feeling is natural. If you're interested in investing, there are all kinds of ways to make $1.43 a day (that's $10 a week) work for you.
Before we look at investment options, let's see what would likely happen if you were to invest $10 a week for 10 years. For the sake of this illustration, let's say your investment earns a 7% annual rate of return.
By the way: If you're wondering if 7% is a realistic rate of return, here's the average rate for several different spans of time:
One more thing about wondering if 7% is a realistic rate of return: That's a great question to ask any time you consider an investment.
$10 a week for 10 years
Let's say you decide to tuck $10 a week under your mattress for 10 years. Since there are 520 weeks in a 10-year period, you would eventually have $5,200 to spend. However, if you invest that same $10 per week for 520 weeks, and that investment earns an average return of 7%, your savings will grow to $7,129.
Some years, the average rate of return will be lower, and some years, it will be higher. What matters is how it does over the long term because investments are made to buy and hold.
Just for fun, here's what would happen if you continued to invest $10 beyond the 10-year mark.
- After 15 years of investing $10 per week, you could expect to have $12,967.
- In 20 years, that number would have grown to $21,154.
- In 25 years, that little $10 a week would be worth $32,637.
- In 30 years, you may be surprised to learn that it's worth $48,742.
And that's just with $1.42 per day.
Options for investing
What's so great about investing is how many options you have. Here are three of them.
1. Certificate of deposit (CD)
If you're feeling a little nervous about risking any of your principal, you can buy a CD at a fixed rate from your bank or credit union. Currently, CDs are enjoying some great rates (although it would be rare to find one that hits 7%). In essence, buying a CD is like loaning your bank money and promising it can keep it for a specific amount of time. In return, your bank pays you a certain interest rate when the CD matures.
Once time is up, you have the option of getting your principal back, plus interest. Or, you can roll it over into another CD. The majority of financial institutions require a minimum deposit of $500 or more, but here are a few that allow you to open a CD with no minimum deposit, and still pay great rates:
| Financial Institution | APY | Term |
|---|
| Ally High Yield CD | 4.65% | 12 months |
| Barclays Online CD | 4.50% | 18 months |
| American Express National Bank CD | 4.75% as of March 14, 2024 | 11 months |
| Capital One 360 CD | 4.90% | 12 months |
Data sources: Ally, Barclays, American Express, Capital One.
Fractional shares are like slivers of stock. Let's say you are wild about Chipotle, but at over $1,800 a share, buying an entire share is a little rich for your blood. So, instead, you buy a sliver of a share. As money permits, you can buy more slivers. In any case, as Chipotle prospers, any slivers you own increase in value.
There's a lot to like about fractional shares. For one thing, they allow you slowly wade into the stock market, learning along the way without betting the entire farm.
3. 401(k)
If your employer offers a 401(k) program, you're in luck. Not only are contributions made with pre-tax dollars (before taxes are withheld), but if your employer matches even a portion of your contributions it's like receiving free money.
If this is your first time investing, the fact that your investments are professionally managed is an advantage. You can follow along online or by combing over your statements to get a sense of how the process works and begin to feel comfortable with long-term investing.
Remember, you don't have to know everything there is to know before you invest. It's okay to start out small and learn more about investments along the way. And if you're tempted to believe that $10 a week is too little to invest, keep those two magic words in mind: compound interest.
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FAQs
$10 a week for 10 years
What is the 10-year rule on investing? ›
This is the simple 10-year rule. The account must be fully distributed (at least) by the end of the 10th year following year of death of the owner. No annual distributions are required.
How much is $10 a day for 20 years? ›
Let's say you invest $10 a day over a period of 20 years and earn a 10% average annual rate of return. By the end of those two decades, you would have an account balance of around $208,945.93. And, if you continued for another 10 years, by the end of 30 years your balance would have grown to over $600,000!
How much money do I need to invest to make $4000 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.
Is buying $10 of stock worth it? ›
Stocks that trade in the $5 to $10 range are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. They are, however, still inherently more speculative than many other higher-priced stocks.
What happens if you invest $1,000 a month for 20 years? ›
Investing $1,000 a month for 20 years would leave you with around $687,306. The specific amount you end up with depends on your returns -- the S&P 500 has averaged 10% returns over the last 50 years. The more you invest (and the earlier), the more you can take advantage of compound growth.
How much will $1,000 invested be worth in 20 years? ›
The table below shows the present value (PV) of $1,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
How much is $10 a week for 10 years? ›
$10 a week for 10 years
Since there are 520 weeks in a 10-year period, you would eventually have $5,200 to spend. However, if you invest that same $10 per week for 520 weeks, and that investment earns an average return of 7%, your savings will grow to $7,129.
What is $100 a month for 10 years? ›
(Enter "$100" in the "Contribution amount" field, then select "Monthly" for the "Contribution frequency" option.) You would end up with $32,023.26 after 10 years, compounded daily (assuming 365 days a year). The interest would be $10,023.26 on total deposits of $22,000.
Is investing 10 dollars a week good? ›
While $10 isn't enough to generate substantial income, it's a starting point, and you can increase your investment amount whenever you're ready. What are your best options here? Fundrise.
If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.
How much do I need to invest to make $1,000 a month? ›
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
How much will 100k be worth in 30 years? ›
Answer and Explanation: The amount of $100,000 will grow to $432,194.24 after 30 years at a 5% annual return. The amount of $100,000 will grow to $1,006,265.69 after 30 years at an 8% annual return.
Do penny stocks make money? ›
Can you make money with penny stocks? Yes, you can make money with penny stocks, but you can also make money playing the lottery, though you probably won't. To make money in penny stocks, you have to be able to separate the good companies from the bad, and that means you have to be able to analyze companies.
Is Walmart a good stock to buy? ›
Walmart has a consensus rating of Strong Buy which is based on 27 buy ratings, 3 hold ratings and 0 sell ratings. The average price target for Walmart is $74.11. This is based on 30 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
What happens if you invest 20000 a month for 10 years? ›
If an investor invests 20,000 per month for 10 years at the interest rate of 12%, he will be able to generate INR 47 lakh, i.e., more than double the amount he earned in the first five years. In addition, the earnings in 15 years will double the income that an investor had generated in the first 10 years.
How much would you have if you invest $9500 per period for 13 years at 10 percent? ›
Expert-Verified Answer
After 13 years of investing $9,500 per period at 10% interest, the investment would be worth approximately $281,461.22.
What are the exceptions to the 10-year rule? ›
This 10-year rule has an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner.
What does the 10-year rule apply to? ›
Town and Country Planning Act 1990
The 4-year currently relates to building, engineering, mining or other operations and the change of use of any building to use as a single dwellinghouse. The 10-year rule applies to any other breach of planning control. The Levelling-up and Regeneration Act became law in October 2023.
