Saving vs Investing

Grow

Historically the stock market has offered much better returns than savings accounts over the long term. As a very rough guide, you could realistically expect at least 5% per year on average. It’s always better to use a modest percentage when planning, rather an ambitious one.

Let’s assume that you have £100 per month to put into a savings account or invest in the stock market. As you can see from the tables below, the difference over time is staggering.

Savings Account

10 Years20 Years30 Years
£13,271£29,479£49,272

(Above figures calculated on an optimistic 2% interest rate)

Stock Market

10 Years20 Years30 Years
£15,528£41.103£83,225

(Above figures calculated on 5% gain per year on average)

Even as little as £25 per month over 30 years (£9,000 total) could grow to £20,806 if you invested it into the stock market (£11,806 profit).

Obviously, these figures are not guaranteed but they are entirely realistic. There will be good years and bad years though, which is why it has to be considered a long-term strategy.

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