How One Vanguard ETF Could Make You a Millionaire

Is your goal to retire a millionaire? If so, you are in good company. And in reality, a few million dollars is not an unreasonable goal for a retirement nest egg. Keep in mind that the savings you make over your retirement years will need to last for decades, and starting with a few million or more is a good way to ensure you don’t run out of money while you’re alive.

Additionally, you may aim to become a millionaire before you reach your final years. It is also a reasonable goal.

The key, in any case, is to start investing at a young age and to choose your investments wisely. And guess what? You don’t have to be an investment guru to tick this last box. All you really have to do is put this ETF in your portfolio.

Your ticket to wealth

ETF, or exchange traded funds, considerably simplify the investment. The reason? You can buy stocks from a single ETF and add dozens or more stocks to your portfolio. And if your goal is to liquidate a millionaire, the Vanguard S&P 500 ETF(NYSEMKT: VOO) is a good bet.

the S&P 500 Indexconsists of – you guessed it – 500 stocks, but these aren’t just any stocks. These 500 companies are the largest that trade publicly, so they are a solid measure of the performance of the stock market as a whole. As such, an ETF that aims to match the performance of the S&P 500 is a good thing to have in your portfolio.

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Since its inception in 2010, the Vanguard S&P 500 ETF has returned 15.74%, which virtually mimics the 15.78% return of the S&P 500 during that time. Suppose you invest $ 500 in this ETF each month and its performance is comparable – let’s call it 15%. Continue like this for 30 years, and you will be entitled to $ 2.6 million.

Even though the S&P 500 – and the Vanguard S&P 500 ETF – only offer an average annual return of 10% during this period, you will still be looking at around $ 1 million in your portfolio for that single investment.

Additionally, the Vanguard S&P 500 ETF has a very low expense ratio – just 0.03%. That’s the beauty of ETFs – you won’t pay high investment fees that eat away at your returns because these funds are passively managed.

An easy way to accumulate millions

The Vanguard S&P 500 ETF is just one of many ETFs that track the S&P 500. And to be clear, there are other clues you might want to look at if your goal is to grow your wealth over the long term. But the S&P 500 has a solid solid performance history, and it’s a good bet if your goal is to become a millionaire without doing a lot of work to get there.

The only downside to buying Vanguard S&P 500 ETF stocks is that it won’t help your portfolio outperform the market as a whole. But if you are happy to match its performance, this ETF could make you very rich.

Maurie backman has no position in any of the listed securities. The Motley Fool owns stocks and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content partner providing financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

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