I Want To Set My Grandkids Up For Success In 50 Years – Will $400,000 At 8% Really Be $21 Million?

Imagine having the chance to set your grandkids up for a future where they don't have to worry about financial security. In a Reddit post, a user shared that her responsible parents had left her a financial cushion and now, she wanted to keep that cycle going – for her grandkids. She explained, "We're far from rich, but we're all in good shape financially. I'm receiving a decent inheritance and since I won't need it, why not invest it for my grandkids' future?"

She's thinking long-term – like, really long-term. Her plan? Put $400,000 into an investment, let it sit for 50 years and aim for an 8% annual return. If she's right, that could grow into $21 million. But is that realistic?

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 "With proper estate planning, could I set this up so my grandkids see this in 50 years?" she asked. 

Other users jumped in with thoughts, ideas and even skepticism. Some loved the idea, saying they'd want the same for their family, but others offered different perspectives.

One suggested, "The grandkids might have more use for the money in 20 or 30 years than in 50 years." Another user commented, "Most people get inheritances in their 60s, but imagine if they got it in their 30s – that's when it really makes an impact." A common theme was that she could set her grandkids up for success as young adults with less money rather than letting the nest egg grow. 

And the big question: Is $400,000 at 8% enough to hit the $21 million mark and were her calculations correct? 

See Also: Many are using this retirement income calculator to check if they’re on pace — here’s a breakdown on how on what’s behind this formula.

An investment of $400,000 with an 8% average return, compounded annually for 50 years, could grow to around $21.3 million theoretically. The calculation is straightforward:

• Formula: Future Value = Principal * (1 + rate of return) ^ years

• Math: $400,000 * (1 + 0.08) ^ 50 = approximately $21.3 million.

So yes, in theory, this plan could work if that 8% return holds up. But keep in mind that the market doesn't follow a straight line. An 8% average return isn't guaranteed; the stock market fluctuates and over 50 years, a lot can change. Taxes, fees and inflation would also chip away at the final number.

Ultimately, the idea behind this user's plan reflects a broader trend – setting up younger generations for success. Whether it's covering student loans, funding down payments or offering a nest egg for retirement, there are many ways to help family members beyond leaving a big inheritance.

Of course, before embarking on a major investment strategy, consulting a financial advisor can help breakdown the numbers, offer tax insights and navigate estate planning options. It's an inspiring vision, but as one user wisely put it, "OP needs to invest in the grandkids, not the bank."

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