Investing in the stock market can be a fantastic way to generate wealth, and it’s not as difficult as it may seem to make a lot of money over time. In fact, it’s possible to accumulate hundreds of thousands of dollars or more with very little effort.
The key to growing your savings in the stock market is to invest in the right places. And there’s one investment, in particular, that can turn $100 per month into more than $135,000. Here’s how to get started.
Choosing the right investments
There’s not necessarily a right or wrong approach to choosing investments, but some options do require more effort than others. If you prefer a “set it and forget it” type of investment, S&P 500 ETFs may be the best option for you.
An S&P 500 ETF is a collection of stocks that aims to mirror the performance of the market as a whole. This type of fund includes the same stocks as the S&P 500 index itself, which contains around 500 stocks from the largest and strongest companies in the U.S.
With an S&P 500 ETF, you never need to worry about choosing individual stocks or researching companies. All you have to do is invest as much as you can afford, then let the fund take care of the rest.
Another advantage of this type of investment is that it’s more likely to survive stock market volatility. The S&P 500 has existed for many decades, and in that time it’s faced countless corrections, crashes, and bear markets. But it’s survived every one of them, making it highly likely it will recover from any future downturns as well.
Growing your money with S&P 500 ETFs
Perhaps the best part about investing in S&P 500 ETFs is that they are very low maintenance, and it’s possible to earn hundreds of thousands of dollars with little to no effort.
Historically, the S&P 500 has earned an average rate of return of around 10% per year. That means that the annual highs and lows each year have averaged out to around 10% per year over the long run.
Let’s say you’re investing in an S&P 500 ETF, and you’re earning slightly lower-than-average returns of 8% per year. Let’s also say that you’re investing $100 per month. At that rate, you’d accumulate more than $135,000 after 30 years.
The more you’re able to invest each month and the more time you give your money to grow, the more you’ll earn over time. Say, for example, you’re investing $150 per month while still earning an 8% average annual return. After 30 years, you’d have around $204,000. In 40 years, you’d accumulate around $466,000, all other factors remaining the same.
The sky is the limit when it comes to how much you can earn. While there are never any guarantees with the stock market, S&P 500 ETFs are one of the safest types of investments that can still earn you a significant amount of money. By investing consistently and leaving your investments alone to grow, you could build a six-figure portfolio with zero effort.
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