$100 a Month in ETFs vs Crypto
A 20-Year Projection of Your Investment Growth
Projected Annual Returns
Projected Growth Over 20 Years
ETF Final Value
$0
Crypto Final Value
$0
Difference
$0
Contributions vs. Growth
About the Investment Projection Calculator
This calculator demonstrates the power of consistent, long-term investing and the dramatic difference that your chosen asset class can make. By projecting the growth of a fixed monthly investment in both a traditional ETF and a more volatile asset like cryptocurrency, this tool helps you visualize the potential outcomes of different investment strategies over a 20-year horizon.
Formula Explained
The calculator uses the future value of a series formula to project the growth of your monthly investments:
- FV is the Future Value of the investment.
- P is the monthly payment amount.
- r is the monthly interest rate (Annual Rate / 12).
- n is the total number of payments (Years × 12).
How to Interpret the Results
This projection illustrates the fundamental trade-off between risk and reward:
ETFs: The Stable Path
The ETF projection shows the power of steady, diversified growth. While the final number is lower, it's based on decades of historical market performance, representing a more probable outcome.
Crypto: High Risk, High Reward
The crypto projection shows a much higher potential outcome due to the higher assumed rate of return. However, this comes with extreme volatility and risk; the actual return could be significantly lower or even negative.
Frequently Asked Questions
What is an ETF? →
An ETF, or Exchange-Traded Fund, is a type of investment fund that holds a collection of assets, such as stocks, bonds, or commodities. When you buy a share of an ETF, you are buying a piece of that entire portfolio. Broad-market ETFs, like those tracking the S&P 500, are popular for their diversification and historically stable returns.
What is a realistic annual return for ETFs? →
The historical average annual return for the S&P 500, a common benchmark for ETFs, is approximately 10%. However, past performance does not guarantee future results. A more conservative estimate often used for long-term planning is between 7% and 8% to account for inflation and market fluctuations.
Why is cryptocurrency considered a high-risk investment? →
Cryptocurrency is considered high-risk due to its extreme price volatility. Prices can swing dramatically in short periods. It is a newer asset class with less historical data, and its value is largely driven by speculation rather than underlying fundamentals like company earnings. While the potential for high returns exists, so does the potential for significant losses.
What is compound interest? →
Compound interest is the interest you earn on your initial investment (the principal) plus the interest you've already earned. It's often called 'interest on interest' and is the reason why long-term investing can be so powerful. The longer your money is invested, the more significant the effect of compounding becomes.
Should I invest in ETFs or Crypto? →
The choice depends on your personal risk tolerance and financial goals. ETFs offer a diversified, historically proven, and relatively stable path to long-term wealth. Crypto offers the potential for much higher returns but comes with significantly higher risk and volatility. Many investors choose a blended approach, with a core portfolio in ETFs and a smaller, speculative portion in crypto.