What if you save 5,000 yen a month for 20 years? | A simulation based on past 5-year annual rates and conservative annual interest rates

“You can’t start investing unless you have a lump sum of money.”
Don’t you think so?

Many online securities companies allow you to start saving from as little as 100 yen.
In this article, I will simulate what happens if you save 5,000 yen a month for 20 years.

Here is the conclusion first (this is a simulation).
・If we are conservative with a 3% annual interest rate, it’s about 1.64 million yen
・If it’s a 5% annual interest rate, it’s about 2.06 million yen
・If we apply the annual rate of the last 5 years as is, it’s about 11.77 million to 40.42 million yen
(The principal is 1.2 million yen in all cases)

However, the final numbers are quite optimistic simulations that apply “five years that happened to be good.”
In this article, I will also explain how to view those figures.

■ Simulation conditions
・Save 5,000 yen every month at the end of the month (240 times over 20 years, principal 1.2 million yen)
・For the annual interest rate, we use two assumptions of 3% and 5%, and the annual rate of the last 5 years (for 3 products)
・Profits are reinvested as they are (compound interest)
・Trust fees, exchange rate fluctuations, and taxes are not considered for now

The annual interest rate is just an assumption. It does not indicate actual investment performance.

■ Simulation results
In the case of a 3% annual interest rate
・After 10 years: Principal 600,000 yen → approx. 699,000 yen
・After 20 years: Principal 1.2 million yen → approx. 1.64 million yen
・After 30 years: Principal 1.8 million yen → approx. 2.91 million yen

In the case of a 5% annual interest rate
・After 10 years: Principal 600,000 yen → approx. 776,000 yen
・After 20 years: Principal 1.2 million yen → approx. 2.06 million yen
・After 30 years: Principal 1.8 million yen → approx. 4.16 million yen

The longer the time, the wider the gap from the principal.
This is the effect of compound interest.

■ What if we apply the annual rate of the last 5 years? (Reference)
As of the end of August 2026, the annual rates for the last 5 years (annualized return) listed on Yahoo! Finance are as follows:
・Investment trust linked to the S&P 500: Annual rate approx. 21.32%
・All Country World Equity (Orkan): Annual rate approx. 19.72%
・FANG+ (Investment trust linked to the NYSE FANG+ Index): Annual rate approx. 29.55%

This is a simulation of saving 5,000 yen a month, assuming this annual rate continues for 20 years.
・S&P 500 annual rate 21.32%: After 20 years approx. 14.39 million yen
・All Country World Equity annual rate 19.72%: After 20 years approx. 11.77 million yen
・FANG+ annual rate 29.55%: After 20 years approx. 40.42 million yen (especially for reference)
(The annual rate is converted to a monthly interest rate for calculation)

FANG+ is an index that concentrates investment in about 10 major US technology companies. The last 5 years have been particularly strong, but because of that, the price movement is large, and there are years when it drops significantly. It is unlikely that an annual rate of nearly 30% will continue for 20 years, so please treat it as a reference only. (The annual rate of FANG+ is the value of the iFreeNEXT FANG+ Index)

When put into a graph, this difference looks large.

■ However, these numbers are “quite optimistic”
・The last 5 years have been a period where stock prices have risen significantly. In the long run, it is not realistic to think that such a high annual rate will continue for 20 years
・If an annual rate in the 20% range continues, it is calculated that money will double every 4 years or so. Compared to the average over a long period in the past, this is a very high level
・In reality, there are years when it drops significantly. The performance of 5 years does not guarantee the next 5 years
・This simulation is just “an example of applying past numbers”

I think it is just right to view the conservative 3% annual interest rate as a “minimum guideline” and the 5% annual interest rate as a “normal guideline,” without expecting too much from the size of the numbers.

■ What happens to taxes with NISA?
This is a simulation of saving for 20 years at a 5% annual interest rate.
・Increased amount: approx. 855,000 yen
・In a regular account, a tax of about 20.315% is applied, and about 174,000 yen is deducted
・In a NISA account, this tax is not applied

Even with the same investment, the amount remaining in your hand changes.

■ Points to note about this simulation
・There is no guarantee that the 3% or 5% annual interest rate, or the annual rate of the last 5 years, will continue
・Actual price movements fluctuate every year. There are also years with negative returns
・There are times when the principal is lost
・Because costs such as trust fees are incurred, the actual amount will be less than this

■ Tips for continuing
・Make monthly savings automatic and don’t look at them
・Use surplus funds separate from living expenses and keep the amount reasonable
・Don’t panic if prices fall, and continue according to the rules
・If you have extra money, increase it little by little

■ Frequently Asked Questions
Q. Is there any point in doing it even with 5,000 yen a month?
A. Yes, there is. You can experience price movements and acquire the habit of investing.

Q. What if I want to increase it more?
A. You can increase the amount within a range that does not strain your lifestyle. At many securities companies, you can change the accumulation amount later.

■ Summary
・If you save 5,000 yen a month for 20 years, it will be approximately 1.64 million yen at a 3% annual interest rate, and approximately 2.06 million yen at a 5% annual interest rate (simulation)
・Applying the annual rate of the last 5 years (approx. 20-30%) would result in approximately 12 million to 40 million yen, but these are quite optimistic figures
・The longer the time, the greater the effect of compound interest
・With NISA, there is no tax on the gains
・Simulations do not guarantee the future. Continue with surplus funds without overextending yourself

We also explain the basics of NISA in a video.

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This article is a simulation, not an actual investment record.
I plan to record my actual efforts in the future.

※ This article is for informational purposes only and is not an invitation to invest. The figures are simulations based on assumptions or past performance and do not guarantee future results. Please make your own final investment decisions.