CIO Insights: Raise your odds of making millions

10 minute read

Last month, we showed that time in the market beats timing it: invest regularly, stay diversified, and let compounding do the work. A financial goal that may look out of reach today – a couple of million dollars for retirement, for example – is actually achievable on an ordinary income, given enough time.

Suppose you're doing that: you have a target, you're investing every month, and you have years to go. Even with the best plan, the outcome is not fully in your hands – market returns can vary from year to year, and their path over the decades can change where you land.

What you can control, however, is the odds of meeting that target. In this month's CIO Insights, we answer the question: how do you invest to maximise the chance of meeting your financial goals?

Key takeaways 

• Markets are inherently uncertain, so the same plan can end in very different places. But the odds of reaching your goal are something you can improve. We simulated 500,000 scenarios for an investor with a goal to retire with $1.5 million. The range of outcomes was wide, with most scenarios falling between $740,000 and $5.4 million, and the investor reaching their target about two-thirds of the time. To raise their odds of reaching a financial goal, an investor can pull three levers: how much risk they take, how much they invest, and how much time they give their money to compound – with some raising the odds far more than others.
• Risk: The right amount of risk depends on your target. Investing in riskier assets doesn’t always mean more return. Higher volatility widens the range of outcomes, so the extra potential upside comes with deeper downside. In our simulations, a conservative portfolio grew too slowly to give the plan a realistic chance of reaching the investor's goal, and a single, volatile asset class made the swings so wide that more outcomes fell short. A diversified portfolio at a risk level matched to the goal gave the best odds.
• Contributions: Invest enough to give your plan a good chance of reaching the goal. Doubling the contributions in our simulations meaningfully raised the chance of reaching the target at every risk level. Doubling them in a bond portfolio matched the odds of the riskiest one, with five times as much money still standing in the worst scenarios. In short, investing more can take the place of taking more risk, and it leaves you with more money even when returns are disappointing.
• Time: Use time as your biggest advantage. Why does time in the market beat timing the market? Because, given enough years, compounding does most of the work. In our simulations, doubling the time invested raised the same plan's chance of reaching the target by almost 80 percentage points. Every year you wait shortens the time your money has to compound – so the best time to put your plan to work is now.

(See our Glossary at the end for a breakdown of the terms used in this article.)

What's your number, and what are your odds of reaching it?

The starting point of every retirement plan is a number: how much you need to have on the day you retire. To find your number, take what you expect to spend each year in retirement and divide it by your withdrawal rate – the share of your portfolio you'll sell each year to fund that spending. 

Let’s follow a hypothetical investor who has a $1.5 million retirement target. They have $50,000 already in the bank, 25 years to go, and $1,500 a month going into a diversified global equity portfolio – one that averages about 9% a year and 16% volatility, in line with what global equities have delivered over the long run.¹ (Note: These figures are illustrative. Your own target, timeline, and monthly amount will differ, and so will your odds.)

Markets don't always deliver that 9% every single year, so we ran the plan through 500,000 possible paths of market returns across those 25 years. As Exhibit 1 shows, the median outcome was nearly $2 million – above the $1.5 million target.

But the median hides a relatively wide range: the plan finished between about $740,000 and $5.4 million in 9 out of 10 scenarios (i.e., between the 5th and 95th percentile). It’s also important to note that 65% of scenarios reached the target, which means the plan fell short about a third of the time.

The investor executed the same plan in every simulation. That means the resulting range of outcomes was due to the path of returns alone, or the sequence of good and bad years the market happened to deliver.

As an investor, you can’t choose your sequence of returns. But you can improve the odds of reaching your target. You can pull on a few levers to do that: how much risk you take, how much you invest, and how much time you give the plan.

How much risk should you take? More isn't always better

Risk is where many investors tend to look first, using the logic that a higher-returning portfolio gives you a better shot at reaching your goal. A higher expected return for an investment can improve your chances – up to a point. Past that point, the higher risk that pulls up the top of the range of outcomes also pulls down the bottom, and the odds of reaching your goal start to fall.

Exhibit 2 below plots the annualised returns and volatility of two dozen asset classes measured over nearly three decades. The takeaway: higher volatility (i.e., risk) doesn’t reliably deliver higher returns.

The dotted line in the chart marks what global equities earned for each unit of volatility – their Sharpe ratio, assuming a risk-free rate of zero. An asset above it (marked in dark blue) earned more per unit of risk than global equities did; an asset below it (marked in light blue) earned less.

Most of the high-volatility assets sit below the line: the more volatile an asset, the more likely it earned less for each unit of risk it carried. In fact, some of the most volatile holdings were among the worst performers: China returned 3.6% a year with 31% volatility, and Brazil gained 6.4% at 36% volatility. Both trailed the returns of a 60/40 portfolio that had a third of the volatility.

Not too much, not too little – take just enough risk to reach your target

To help determine the appropriate risk, we ran our hypothetical investor’s plan through three illustrative asset classes at different points of the risk scale. Nothing changes except where the money goes – a portfolio of only bonds, a diversified global equity portfolio, and a single-country equity exposure (we use Brazilian equities as an illustrative example). 

Exhibit 3 shows where each one ends up after 25 years, and how often it reaches the target. Global equities reach the target 65% of the time. The bond portfolio never hits it, and the single-country portfolio only manages to 51% of the time despite having the highest average return of the three.

Starting from the top, bonds fail to reach the investor's goal because every outcome finishes short: the top of the range gets to only $1.2 million after 25 years. The asset class's low volatility keeps its outcomes close together, but they come in below what this investor needs.

At the other end, investing in high-risk assets also may not get you to your goal. Take the example of the single-country exposure in our simulations. Its average annual return beat global equities (13% versus 9%), but also came at the cost of much higher volatility (37% versus 16%).

Our simulation shows that it is a sub-optimal strategy for two reasons:

1. The volatility produced the widest range of outcomes by far of the three assets. Its best outcomes were upwards of $16 million, while its worst finished below where bonds ended up. 
2. Not only is the range of outcomes bigger, the central case’s compounded return – also known as its geometric mean – is also lower than the diversified global equity portfolio (6.4% versus 8.2%). That’s because it has bigger swings: a 50% loss takes a 100% gain to recover from its bottom, so the more a portfolio swings, the further its compounded return falls below its average.

The lesson here? Of the three, the diversified global portfolio gave the best odds of reaching the target. Loading up on risk widened the outcomes without improving the odds. 

The two levers that raise your odds more reliably: investing more, and starting sooner

A riskier portfolio only pays off if it earns more, and no one can know in advance whether it will. 

So if raising risk isn't a reliable way to reach a financial goal, what is? The amount you invest each year, and the number of years you invest for. Both raised the chance of reaching the target in every combination we simulated.

How much should you invest? Size your contributions to hit your goal

Here, the key question is how to size your contributions: how much should you stash away each month in investments? The aim is to invest enough to give your plan a good chance of reaching the goal, without giving up more current spending than you need to.

Say our hypothetical investor doubled the amount they invested each year, from $1,500 a month to $3,000. Their chance of reaching their $1.5 million target jumped by nearly 30 percentage points, from 65% to 93%. Exhibit 4 shows the same thing happening at every risk level: the extra money shifts each range of outcomes to the right, so more of them end up above the target.

It also cushions the downside. Take the bottom 5% of scenarios. Even there, our investor finished with about $1.4 million instead of $740,000: still short of the target, but with nearly twice the money.

That's what makes this lever different from risk. More risk stretches the range in both directions; investing more raises the whole range. And there's no point at which it stops working – every extra dollar invested lifts the final balance.

So if you haven’t been regularly investing your extra cash, this is a solid first lever to pull. Here’s the math: the risky single-country portfolio with $1,500 a month in contributions reached the goal 51% of the time. Our investor could’ve achieved the same odds of reaching the goal by doubling their contributions but investing in the much lower-risk bond portfolio. In the bottom 5% of scenarios, the bond investor finished with five times the money – $1.1 million versus $230,000 – and much better sleep.

How long should you invest? Use time as your biggest advantage

The last lever – and arguably the best one an investor can pull – is time. Say our investor kept everything else the same – the global equity portfolio, $1,500 a month going in – but had 30 years instead of 15. Their chance of reaching the $1.5 million target goes from 6% to 85% – nearly an 80 percentage-point difference! 

Exhibit 5 shows that more time helps in every combination we simulated: whatever the risk level and however much goes in each month, more years raised the chance of reaching the target, and nowhere did they lower it.

The reason is compounding. More years mean more contributions go in, and every dollar already invested has longer to grow. Compounding does most of its work towards the end: growth in the final decade builds on everything the earlier decades accumulated, which is why the odds climb so steeply between 15 and 30 years. 

Exhibit 6 breaks down our hypothetical investor's plan into what it builds each year. Year one adds about 1% of the final total, year 25 close to 9%. If you sum the last 10 years, they account for 63% of the nearly $2 million our investor ends with. In short, most wealth is built in the final stretch, so give your plan as long a run as you can.

(For more on this, see CIO Insights: How do you make millions? Give it time.)

Time is also the one lever you can't add later. An investor can raise their contributions at 50, but they can't give themselves ten more years of compounding. Starting earlier improves your odds at every level of risk and contribution without any cost – so the best time to put your plan to work is now.

How do you maximise your chances of reaching your goal? Start early, invest more

Clients often come to us with a financial goal: buying a house, sending their kids to school, or retiring. They have a target amount, a target date, and a question about whether their portfolio can get them there. 

The first instinct for many investors whose plan looks short is to take on more risk in the hope of higher returns. But risk cuts both ways: a more volatile portfolio widens the range of outcomes, and can lower the odds of reaching the target.  

What really matters is starting early and investing more. Both levers raise the chance of reaching a target further than any portfolio decision, both improve the outcome when markets disappoint, and neither depends on a forecast. In our simulations, taking more risk barely moved the odds. Doubling the contribution raised them by 30 percentage points. Doubling the time raised them by 80.

How much you invest, and for how long, are your decisions to make. Get those two right, and the market can do the rest.

Authors

Stephanie Leung, Chief Investment Officer

Stephanie and her team oversee the full spectrum of investment products and portfolios offered at StashAway. She brings more than two decades of investment expertise across multiple asset classes. Prior to joining StashAway in 2020, she managed investment portfolios at institutions such as Goldman Sachs and multi-billion dollar family offices in the region.

Justin Jimenez, Head of Macro and Investment Research

Justin brings nearly 15 years of experience in economic and investment research to StashAway, where he contributes to shaping the investment office’s views on the global economy and financial markets. Before joining StashAway in 2022, he was an economist at Bloomberg, and holds degrees in international economics and finance from Columbia and UCLA.

Jim Tai, Head of Quantitative Research and Portfolio Management

Jim brings nearly two decades of quantitative research and systematic trading expertise to StashAway. Having managed quantitative strategies across leading financial institutions in Hong Kong and New York, he holds advanced degrees in Applied Mathematics and Engineering from Columbia and Princeton.

Glossary

Compounding

Earning returns on past returns, as well as on the money you put in. Growth accelerates over time because each year's gains build on everything accumulated before them.

Withdrawal rate

The share of your portfolio you sell each year to fund spending in retirement. Planned annual spending divided by the withdrawal rate can approximate the portfolio you need: $60,000 a year at a 4% rate requires $1.5 million.

Volatility

How much an investment's returns swing around their average, expressed as an annual rate.

Expected return (average return)

The return delivered on average over many years. Any single year can land above or below it.

Sharpe ratio

An investment's return above the risk-free rate, divided by its volatility: the return earned for each unit of risk taken. A higher ratio means the investor was paid more for the risk carried. Exhibit 2 sets the risk-free rate to zero, so the ratio there is return divided by volatility.

Risk-free rate

The return available with essentially no risk of loss, usually measured by short-term government bills. It serves as the baseline for judging other investments' returns.

60/40 portfolio

A common benchmark for a balanced portfolio, with 60% in global equities and 40% in bonds.

Compounded return (geometric mean)

The single yearly rate at which money grows once the swings along the way are accounted for. It sits below the average return, and the gap widens as volatility rises, because losses cost more ground than equal-sized gains recover. The global equity portfolio in our simulations averages about 9% a year and compounds at 8.2%; the single-country portfolio averages 13% and compounds at 6.4%.

Endnotes

1. Each year the portfolio earns a return drawn at random from a fixed distribution, described by two numbers held constant over the whole horizon: an expected annual return and a volatility, both measured from monthly index data from December 1997 to June 2026. Annual returns are lognormal – the logarithm of the return follows a bell curve – and each draw is independent of the last, which is the standard geometric Brownian motion assumption and excludes momentum, mean reversion and volatility clustering. It describes the investment's returns, not the balance, which also grows by each year's contribution; money already invested compounds at roughly the expected return minus half the volatility squared. Contributions are at the start of each year, the portfolio is held on every path, and there is no leverage. Figures are nominal and before taxes and fees. Every probability is the share of 500,000 simulated paths reaching the target.

Disclaimer: Returns data as of 30 June 2026 unless stated otherwise. Past performance is not indicative of future returns.