Prepared for a Million-Dollar Retirement Fund? Opt for a Single ETF for Long-term Investment.
Most folks dream of having ten million bucks tucked away for retirement, but the reality is, most of us won't manage it. In fact, we'll probably fall short by a considerable margin. However, achieving that ten million dollar nest egg isn't totally impossible. All it requires is some serious discipline and adhering to the investment strategies below, using only a single Exchange-Traded Fund (ETF).
Achieving a ten million dollar retirement fund
Before diving into where to invest your hard-earned cash, let's first discuss how to invest it. This, folks, is the real key to amassing substantial long-term wealth.
The greatest trick in the book when it comes to wealth creation is regular investments. Instead of spending the next few minutes researching individual stocks or ETFs to purchase, take a second to enable automatic investing in your online brokerage account. The long-term results will be nothing short of impressive.
Automatic investments imply that your brokerage account will invest a predetermined amount of money each month on your behalf, without you having to lift a finger. For instance, your brokerage account can transfer $500 from your savings account on the first of every month, then use those proceeds to buy shares in an ETF that tracks the S&P 500. While selecting solid investment vehicles is crucial, consistently investing more money over time is just as crucial. This not only ensures regular saving but also helps in dollar-cost averaging, securing favorable entry points for new investments.
Let's say you start out with absolutely nothing. If you invest $500 every month and earn the long-term average market return of around 10%, you'll end up with a ten million dollar portfolio in less than 53 years. That means a recent high school graduate who employs this investing technique will be worth ten million dollars by the age of 71. Not too shabby!
If you want to reach ten million faster, there are a few things you can do. First, start out with more than zero dollars. Second, invest more than $500 per month. Third, earn more than 10% per year. But regardless of which lever you choose to manipulate, automatic investments are essential for anyone aiming to reach the ten million dollar mark.
This leaves only one question: Where should your automatic investments be directed?
This ETF will take you across the finish line
If you're ready to begin saving, the only ETF you'll ever need is the Vanguard S&P 500 ETF (VOO -0.24%). Over several decades, this ETF has averaged returns in excess of 10%. And since it's a Vanguard fund, its expense ratio is an impressively low 0.03%.
It's truly that straightforward. Set up an automatic investment plan that puts 100% of your money into the Vanguard S&P 500 ETF, then watch your wealth grow over time. Can't start with a $500 monthly investment? No worries. As little as $20 per month can get you started. After all, it's much easier to adjust the amount of your automatic monthly investment than it is to initiate it for the first time.
Reaching the ten million dollar mark is a long, arduous journey. But the mechanics of getting there aren't rocket science. Automate your investment plan. Then choose low-cost index funds like the Vanguard S&P 500 ETF that will keep your portfolio diversified and growing with minimal expenses.
Investing regularly is crucial for amassing substantial long-term wealth. Instead of manually selecting stocks or ETFs, enable automatic investing in your online brokerage account. This will ensure consistent savings and dollar-cost averaging, leading to favorable entry points for new investments.
To effectively reach the ten million dollar mark, direct your automatic investments towards the Vanguard S&P 500 ETF. This ETF, represented by the symbol VOO, has consistently delivered returns in excess of 10% and boasts a low expense ratio of just 0.03%.
