INVESTING ESSENTIALS
Investing earlier in your life may pay off thanks to the power of compounding interest.
Contributing $50 a month to an investment account can help create impressive savings, even at a moderate 5% annual growth.
It’s a common myth that you need a few thousand dollars to begin investing. It actually works in your favor to start investing early—even with as little as $50 a month—rather than to wait until you have a few thousand dollars saved up. Although investing involves risk, through time and the power of compounding, your $50-a-month investment can contribute significantly to larger financial goals. And it gives you the foundation to gradually grow that amount as your income increases through your career. Work with your financial professional to determine what annual income you would need in retirement to help determine what monthly contributions you’d need to put away into your investment account. See Establishing a plan for your retirement goals for more information.
An easy way to start investing is to use an automatic purchase plan, which allows you to set a monthly amount that works with your budget. With Thrivent Mutual Funds, our automatic purchase plan1 lets you invest a minimum of $50 a month and gives you the opportunity to increase that amount if—and—when your budget allows. You may also add more to your account with one-time investments, such as a bonus from work or a tax refund.
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Here’s how much a monthly $50 investment could bring you over a lifetime as you get started with your investing. This chart shows how over time your initial investment plus the earnings on the investment continue to grow and compound. Your original investment is just a portion of the potential for the growth of your investment—even at a moderate rate of 5% annual growth. See Putting time on your side for more information.
A more aggressive investment may provide an even higher return than the 5% shown above. For example, we can look at an average return closer to the S&P 500® Index (a market-cap-weighted index that represents the average performance of a group of 500 large cap stocks.)
From 1974 through 2024, the S&P 500 grew at an average annual rate of 9.7%2. While it’s important to note that past performance does not guarantee future returns, let’s say that after the investment's expenses and fees, you are able to earn an average return of 10% per year.
In this example with a 10% return, you’ll see that the same $50-per-month investment quickly grows to an even more meaningful amount over time if it is earning a higher percentage of annual growth, and 10% may not be an unreasonable expectation based on the average history of the S&P 500® Index. Keep in mind that achieving this average rate of return will, however, depend on the performance of the funds you select for your investment and being invested for the long term.
Saving early allows you to grow your potential wealth more easily, with less initial contribution. If you’re catching up and haven’t been saving as much as you’d planned for retirement, it’s never too late to begin investing to take advantage of the years you have leading into retirement. This chart gives you an idea of how much an investment of $50 per month could grow depending on your current age.
As you can see, just starting with $50 dollars could add up and contribute significantly to your financial goals if you are consistent with your investing plan. Learn more about how to get started or open an account with Thrivent Mutual Funds.
1 New accounts with a minimum investment amount of $50 are offered through the Thrivent Mutual Funds "automatic purchase plan." Otherwise, the minimum initial investment requirement is $2,000 for non-retirement accounts and $1,000 for IRA or tax-deferred accounts, minimum subsequent investment requirement is $50 for all account types. Account minimums for other options vary.
2 Microtrends, “S&P 500 Historic Annual Returns,” www.microtrends.net, (Jan. 13, 2025).
Take advantage of tax contribution limits and open a Thrivent Mutual Funds IRA today. Choose an account, select mutual funds that match your retirement goals and investing style, and open your account.
