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Many individuals dream of amassing a retirement fund of $10 million, yet few actually achieve this substantial goal. The good news is that reaching this financial milestone is not entirely out of reach for the disciplined investor. By employing certain investment strategies, it’s possible to leverage a single exchange-traded fund (ETF) to help you reach that figure.
Before diving into specific investment options, it’s essential to understand the principles of effective investing. The way in which you invest your money can significantly influence your ability to generate substantial wealth over time.
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One of the most effective strategies for building wealth is through consistent, recurring investments. Rather than spending excessive time selecting individual stocks or ETFs, consider setting up automated investing through your online brokerage account. This approach is likely to yield impressive long-term results.
Automated investments allow your brokerage account to invest a fixed monthly sum without requiring your continuous input. For instance, you could set up your account to withdraw $500 on the first of each month, directing that amount into an ETF that tracks the S&P 500. While selecting sound investment vehicles is crucial, consistently contributing funds is equally vital. This not only facilitates regular savings but also enables you to benefit from dollar-cost averaging, ideally capturing favorable entry points for your investments.
Imagine starting from scratch—if you invest $500 each month and achieve a long-term average return of about 10%, you could accumulate a $10 million portfolio in around 53 years. For a young individual just finishing high school, this method could position them to become a millionaire by age 71.
To accelerate your journey to $10 million, consider these strategies: initiate your investments with more than zero dollars, increase your monthly deposits beyond $500, or aim for annual returns exceeding 10%. Regardless of which strategy you adopt, employing automated investments is essential for those pursuing the $10 million target.
The next logical question is: where should you allocate your automated investments?
If you’re ready to embark on your savings journey, the only ETF you need is the Vanguard S&P 500 ETF (NYSEMKT: VOO). Historically, this ETF has achieved average annual returns exceeding 10% over the decades. With a remarkably low expense ratio of just 0.03%, it’s one of the most cost-effective options available.
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It’s truly that straightforward: set up an automated investment plan that directs all your contributions into the Vanguard S&P 500 ETF and witness the compounding of your wealth over the years. If starting with $500 a month isn’t feasible, beginning with as little as $20 monthly can set you on the path toward financial growth. Adjusting the amount of your automatic investment is typically easier than trying to establish it initially.
The road to accumulating $10 million is a lengthy one, but the fundamental steps to achieve it are not overly complex. Automate your contribution schedule and select efficient index funds like the Vanguard S&P 500 ETF to keep your investments diversified while minimizing costs.
Do you worry you’ve lost out on investing in top-performing stocks? If so, consider this.
Occasionally, our team of expert analysts announces “Double Down” stock recommendations for companies poised for substantial growth. If you’re concerned about missing your opportunity to invest, now may be your best chance to buy before it’s too late. The statistics reveal significant potential:
Amazon: a $1,000 investment made when we recommended it in 2010 would have grown to $23,657!
Apple: if you had invested $1,000 in 2008 during our suggestion, you would now possess $43,034!
Netflix: a $1,000 investment made in 2004 based on our advice has surged to $429,567!
Currently, we are issuing “Double Down” alerts for three exceptional companies, making this an opportune moment to consider these investments.
*Stock Advisor returns as of November 4, 2024
Ryan Vanzo does not hold positions in any of the mentioned stocks. The Motley Fool recommends Vanguard S&P 500 ETF and holds positions in it. The Motley Fool maintains a disclosure policy.
Want $10 Million in Retirement? 1 Simple ETF to Buy and Hold for Decades. was originally published by The Motley Fool
Source
finance.yahoo.com