This 1 ETF could easily make you a millionaire

Many people believe that in order to become a millionaire, they need to build a complex portfolio full of carefully selected stocks. And while this may, in fact, be a ticket to millionaire status, it is also possible to grow a tremendous amount of wealth without doing a lot of work at all. If this sounds like a good option to you, then it is worth looking at the Vanguard S&P 500 ETF (NYSEMKT: FLIGHT).

The advantage of investing in the S&P 500

The S&P 500 Index consists of the 500 largest publicly traded companies, making it an excellent representation of the large market. When you invest in the S&P 500, you not only add quality stocks to your portfolio, you also benefit from instant diversification.

The Vanguard S&P 500 ETF tracks the S&P 500. (If you are not familiar with ETFs, this is short for exchange traded funds. These funds track different market indices and allow you to put together a set of stocks. with just one investment. is no more practical than that.)

The bad news now is that the fund’s goal is not to beat the S&P 500. The good news, however, is that the S&P 500 has performed well over time, and therefore matching it is a problem. good benchmark to aim for. In fact, the Vanguard S&P 500 ETF has produced an average annual return of 15% since inception.

How a single ETF could make you a millionaire

The Vanguard S&P 500 ETF is a great choice as an investment, but let’s be clear: you’ll have to stick with it for a long time for it to turn you into a millionaire.

But let’s say you invest $ 10,000 in this ETF and leave your money alone for 35 years. If that 15% average annual return holds up, you’ll end up with $ 1.33 million. Keep your $ 10,000 invested for 40 years, and you’ll have almost $ 2.7 million.

Of course, not everyone has $ 10,000 on hand to sink into a single ETF. So let’s say instead of a lump sum investment, you buy stocks over time. If you invest $ 100 per month over 35 years, you’ll end up with just over $ 1 million – again, assuming the fund offers the same average annual return of 15% during that window.

An easy ticket to wealth

The Vanguard S&P 500 ETF isn’t the only S&P 500 ETF you can pick up. But it’s a good choice if you want to make a lot of money without having to put a lot of thought or effort into it. Of course, manually selecting a selected group of S&P 500 stocks could offer you a much higher return over time than what the Vanguard S&P 500 ETF will offer you. But if you’re happy with the idea of ​​a 15% annual return, and you’re not looking to spend a lot of time researching companies and updating your portfolio, then this is an investment that just might be for you. serve for many years. come.