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You’ll often hear that get-rich-quick schemes don’t work. And there’s a lot of truth to that. Whether it’s a direct sales opportunity or a stock that’s a so-called guaranteed winner, generally speaking, if somebody promises you that a certain investment will make you wealthy overnight, it generally pays to run the other way.
But I’m here to tell you that there is a super-easy way to get very wealthy, and that it’s totally legitimate. The catch? You won’t get rich overnight — not even close. In fact, to really benefit from this investment, you’ll need to gear up to hold on to it for decades. But if you’re willing to go that route, you can grow a whole lot of wealth with truly minimal effort.
Invest in the broad market
Buying and holding quality stocks is a good way to grow wealth over time. But assembling a portfolio can be a tricky endeavor.
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Hand-picking stocks means having to vet individual companies, keep tabs on their earnings, and sink time into running numbers. That’s something you may have the time or patience for.
The good news, though, is that there’s one investment you don’t have to spend a lot of time researching and contemplating. And it’s an investment that will allow you to effectively put your money into the broad stock market — S&P 500 ETFs.
ETFs, or exchange-traded funds, allow you to own a bunch of different stocks with a single investment. Not all ETFs specifically aim to track and match the S&P 500 index, which consists of the 500 largest publicly traded companies. But the reason I’m a fan of S&P 500 ETFs is that they allow you to basically put your money into the entire stock market without having to do any legwork.
Furthermore, because you’re investing in the broad market, there’s potentially less risk than what you’d face buying individual companies. To be clear, this isn’t to say that there’s no risk, because anytime you put your money someplace other than the bank, the potential for losses exists. But when you buy S&P 500 ETFs, you don’t have to stress when a single S&P 500 company’s stock nosedives. That’s because you’ll have hundreds of other companies in your portfolio, too.
How rich might you get?
The S&P 500 delivered a return of roughly 10.5% between 1926 and 2021. And so the amount of wealth you stand to accumulate will depend on how well the index performs during your investment window and much money you sink into your portfolio.
Let’s be optimistic and assume that over the next 35 years, the S&P 500 will deliver an average annual 10% return. That accounts for good years and bad. Let’s also assume you’re willing to invest $500 a month in S&P 500 ETFs during that time. Stick to that plan, and you’ll be looking at a very impressive $1.6 million portfolio — and at a cost of just $210,000 to you. Or, to put it another way, you’ll enjoy a gain of roughly $1.4 million.
Now one thing you should know about loading up on S&P 500 ETFs is that doing so won’t help you outperform the broad market. But if you’re looking for an easy, stress-free to get very wealthy over time, then sticking with S&P 500 ETFs is a solid plan.
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