Investment Calculator Ramsey

Ramsey Style Investment Calculator

See the power of compound interest based on growth stock mutual fund averages.

Your Investment Future

Total Estimated Balance: $0.00

Total Contributions: $0.00

Total Growth (Compound Interest): $0.00

function calculateRamseyWealth() { var startingBalance = parseFloat(document.getElementById('startingBalance').value); var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value); var years = parseFloat(document.getElementById('yearsToGrow').value); var annualRate = parseFloat(document.getElementById('annualReturn').value) / 100; if (isNaN(startingBalance) || isNaN(monthlyContribution) || isNaN(years) || isNaN(annualRate)) { alert("Please enter valid numbers in all fields."); return; } var monthlyRate = annualRate / 12; var totalMonths = years * 12; // Future Value of Initial Principal var fvPrincipal = startingBalance * Math.pow(1 + monthlyRate, totalMonths); // Future Value of Monthly Contributions // Formula: PMT * (((1 + r)^n – 1) / r) var fvAnnuity = 0; if (monthlyRate > 0) { fvAnnuity = monthlyContribution * ((Math.pow(1 + monthlyRate, totalMonths) – 1) / monthlyRate); } else { fvAnnuity = monthlyContribution * totalMonths; } var totalBalanceValue = fvPrincipal + fvAnnuity; var totalInvestedValue = startingBalance + (monthlyContribution * totalMonths); var totalGrowthValue = totalBalanceValue – totalInvestedValue; document.getElementById('totalBalance').innerText = '$' + totalBalanceValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalContributions').innerText = '$' + totalInvestedValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalGrowth').innerText = '$' + totalGrowthValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('ramseyResults').style.display = 'block'; }

Financial expert Dave Ramsey has long advocated for the "Baby Steps" approach to building wealth. Central to this strategy is the concept of consistent, long-term investing in growth stock mutual funds. This Ramsey Investment Calculator is designed to help you visualize how a dedicated monthly contribution can transform into a significant retirement nest egg through the "eighth wonder of the world": compound interest.

The 12% Math: Reality or Optimism?

You may notice the default return rate is set to 12%. This is the figure Dave Ramsey frequently uses, citing the historical average annual return of the S&P 500. While critics argue that 12% is aggressive and doesn't account for inflation or market volatility, the calculator allows you to adjust this percentage. Whether you use 8%, 10%, or 12%, the principle remains the same: time and consistency are your greatest allies.

Where Does Investment Fit in the Baby Steps?

According to the Ramsey plan, you should not begin heavy investing until you have reached Baby Step 4. The sequence is as follows:

• Baby Step 1: Save $1,000 for a starter emergency fund.
• Baby Step 2: Pay off all debt (except the house) using the debt snowball.
• Baby Step 3: Save 3–6 months of expenses in a fully funded emergency fund.
• Baby Step 4: Invest 15% of your household income into tax-advantaged retirement accounts.

The Power of Monthly Contributions

Many people wait until they have a "large sum" to start investing. However, as this calculator demonstrates, the habit of monthly contributions (Baby Step 4) is often more powerful than the starting balance. By investing $500 a month over 30 years at a 10% return, you could end up with over $1 million—even if you started with $0.

Example Scenarios

Monthly Amount	Years	Annual Return	Total Result
$300	25	10%	$398,040
$500	35	12%	$3,212,308
$1,000	20	11%	$863,041

Diversification: The Four Categories

Dave Ramsey suggests diversifying your investments across four types of growth stock mutual funds to balance risk and reward:

1. Growth: Stable companies that are growing.
2. Growth & Income: Solid, large-cap companies that often pay dividends.
3. Aggressive Growth: Small-cap companies with high potential and high volatility.
4. International: Companies located outside of your home country.

By using this calculator and following a disciplined plan, you can take control of your financial future and build a legacy for your family.