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6 Ways to Grow $7,500 Into a $1 Million Nest Egg

You can build an impressive nest egg starting with $7,500.

By Sarah Sharkey

Edited by Eric McWhinnie

Updated Dec. 17, 2024

If you want to build wealth and grow a $1 million investment portfolio, the right plan can make all the difference. With some planning, consistently investing can push your funds past the $1 million mark.

Here are a few ways to grow your seed money from $7,500 to over $1 million, starting with two ways that won’t get you there.

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Investing $7,500 but nothing else at 10% for 25 years

While you could choose to stop investing with just your $7,500 initial investment, it would be tough to reach $100,000 within 25 years, let alone $1 million. If your investment provided 10% annual returns for 25 years, you’ll have a portfolio worth only $81,260.

Of course, having over $80,000 on hand is impressive. But it’s not even close to the seven-figure mark.

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Investing $7,500 but nothing else at 20% for 25 years

If you invest $7,500 into an asset that provides 20% annual returns for the next 25 years, you would end up with $715,472.

That’s still short of your $1 million goal. Not to mention that you’d need to be the next Warren Buffett to consistently earn 20% returns on your investments year after year. Since the average investor rarely achieves 20% returns, this path isn’t very likely.

The good news is that you can pursue more practical ways of reaching $1 million. Let’s explore a few of those options next so you can start investing.

Investing $7,500 plus $800 monthly at 10% for 25 years

If you start with $7,500 and commit to investing $800 monthly for the next 25 years, 10% returns would lead to a portfolio worth $1,025,392.

Interestingly, 10% annual returns are similar to what the S&P 500 returns over several decades. So, if you invest in a low-cost index fund, these returns could be within your grasp (although past returns don’t guarantee future results).

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Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

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Investing $7,500 plus $1,400 monthly at 10% for 20 years

To accelerate the timeline, you’ll need to kick in more to your investment portfolio each month. Increasing your monthly investment to $1,400 to a portfolio earning 10% yearly will allow you to hit seven figures within 20 years.

At the end of 20 years, your portfolio will be worth $1,012,676.

Investing $7,500 plus $2,550 monthly at 10% for 15 years

For aggressive savers who want to reach $1 million within 15 years, investing $2,550 monthly into an asset with 10% annual returns will do the trick. At the end of 15 years, you’ll have a portfolio worth $1,003,567.

If you have the space in your budget to set aside thousands of dollars each month, it can propel you to your financial goals faster.

Investing $7,500 plus $1,100 monthly at 8% for 25 years

While 10% annual returns are achievable, not every investor will capture such high returns. The stock market is inherently volatile. You shouldn’t expect to earn 10% every year. For investors who want to err on the side of caution, expecting an 8% return might be more realistic.

If your investments return 8% each year, you’ll need to contribute more funds each month to make up the difference on your trek to $1 million.

For savers who add $1,100 to their portfolio each month for 25 years, 8% annual returns will propel them to $1,016,362.

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Investing $7,500 plus $1,800 monthly at 8% for 20 years

If you’re a saver who wants to stay conservative, keep more money in your pocket, and achieve your goal within 20 years, you’ll need to increase your monthly contributions to $1,800.

After investing $1,800 monthly with 8% annual returns for 20 years, your portfolio will reach $1,023,416.

Investing $7,500 plus $3,000 monthly at 8% for 15 years

For savers with a compressed timeline and a conservative outlook, you’ll need to invest even more each month. If you invest $3,000 monthly with 8% annual returns for the next 15 years, your portfolio will reach $1,001,267.

Of course, investing thousands of dollars each month isn’t easy to do. But if you can hit this ambitious goal, you will see the fruits of your labor sooner rather than later. If this level of investing is a serious goal for you, consider picking up a side hustle and slashing your housing and transportation costs.

Bottom line

When it comes to building a million-dollar portfolio, planning ahead is helpful. The sooner you start investing, the longer your funds have to grow.

If possible, consider setting up an automated investment solution to help you stick with the plan. Once you set it up, you can largely forget about the mechanics of investing and focus on living your life with the rest of your income.

More from FinanceBuzz:

Invest in Paintings by Basquiat, Picasso, Banksy

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