All Labs

Wealth Growth Lab

Run guided experiments to discover how starting age, contribution rate, employer matching, expense ratios, and inflation affect long-term wealth. Collect data, compare scenarios, and write a lab report on your findings.

Guided Experiment: Power of Starting Early

If two investors contribute the same monthly amount but one starts 10 years earlier, how much larger will the early starter's balance be at retirement?

Write your hypothesis in the Lab Report panel, then click Next.

Wealth Growth Over Time

$0$500K$1.0M$1.5M$2.0MAge 23Age 29Age 35Age 41Age 47Age 53Age 59Age 65
Nominal Balance Total Invested Real Value (inflation-adjusted)

Controls

Annual Return Rate7.00%
Inflation Rate3.00%
Expense Ratio (fees)0.10%

Employer Match

Employer matches 50% of your contributions up to 6% of salary = $1,800/year

Results Summary

Final Balance
$2,031,876
Real Value (today's $)
$570,028
Total Contributed
$263,000
Employer Match Total
$77,400
Total Growth
$1,691,476
Total Fees
$24,514

Over 43 years (age 22 to 65), you contributed $263,000 and your employer matched $77,400. Investment growth added $1,691,476, while fees consumed $24,514. After adjusting for 3% annual inflation, the purchasing power is $570,028 in today's dollars.

Data Table

(0 rows)
#YearContributions($)Balance($)Real Value($)Fees Paid($)Growth This Year($)
0 / 500
0 / 500
0 / 500

Reference Guide

Compound Growth

Money invested grows exponentially because returns earn returns of their own.

FV=P(1+r)tFV = P(1 + r)^t

A 7% annual return doubles your money roughly every 10 years thanks to compounding.

Employer Match

Many employers match a percentage of your retirement contributions, effectively giving you free money.

Match=rate×min⁡(contribution,cap×salary)\text{Match} = \text{rate} \times \min(\text{contribution}, \text{cap} \times \text{salary})

A 50% match up to 6% of a $60,000 salary adds $1,800 per year to your investments at no extra cost to you.

Fee Drag

Expense ratios are charged annually as a percentage of assets. Even small differences compound into large losses over decades.

rnet=rgross−expense ratior_{\text{net}} = r_{\text{gross}} - \text{expense ratio}

A 1% fee on a $500K portfolio costs $5,000 per year. Over 30 years, the difference between a 0.1% and 1.5% fee can exceed $200,000.

Inflation and Real Returns

Inflation erodes purchasing power over time. The real return tells you how much richer you actually become.

Real Value=Nominal Value(1+π)t\text{Real Value} = \frac{\text{Nominal Value}}{(1 + \pi)^t}

At 3% inflation, $1,000,000 in 30 years has the purchasing power of about $412,000 in today's dollars.