If you invest 1000 dollars in the S&P 500 every month, how much can you earn after 30 years?

Let's get to the conclusion first: If you invest $1,000 every month into an S&P 500 index fund (which amounts to $12,000 a year), based on a historical average annual return of 9.5%, you could accumulate $1.8 million after 30 years.

Sounds ridiculous? But numbers don't lie. Let's take a look at the power of compound interest:

• Invested 60,000 over 5 years → Account balance 725,000
• Invested 120,000 over 10 years → Account balance 187,000
• Invested 240,000 over 20 years → Account balance 649,000
• Invested 360,000 over 30 years → Account balance 1,796,000

This is the magic of compound interest. You only invested 360,000, and the remaining over 1.4 million is the interest the market gave you.

How much can I earn from dividends?

This is a point of concern for many people. The dividend yield of the S&P 500 is currently only 1.2% (due to the high proportion of tech giants), so 1.8 million dollars at this rate can only yield 21,600 dollars in a year.

But this yield has historically been low. Since 1960, the median dividend yield of the S&P 500 is 2.9%. If it can return to this level in the future, 1.8 million dollars could generate 52,200 dollars in passive income per year, which is enough for retirement.

Key Assumptions

Of course, this model has several premises:

1. Must persist for 30 years — this is the hardest part, not everyone can withstand market fluctuations.
2. Regular Investment — Invest on time every month without interruption.
3. Dividend Reinvestment — The dividends received should be used to buy more funds, do not withdraw them for spending.
4. History Will Repeat Itself - Assuming future returns are the same as in the past (this may not hold true).

A Suggestion

When you reach retirement age, don't put all your money in stocks. Gradually shift towards more stable instruments like bonds and CDs, especially if dividend yields are recovering; fixed income products will be more attractive.

Core Logic: You don't need to be a stock genius, nor do you have to stare at candlestick charts every day. By consistently investing in index funds for 30 years, you can accumulate millions in assets through time and compound interest. This is what Buffett means when he says, “You don't have to do extraordinary things to get extraordinary results.”