Here's How Much You Actually Need to Build a $1 Million Portfolio -- and the Simplest Way to Get There
Reaching the seven-figure mark is more attainable than most investors might believe. The key is just starting somewhere as soon as you can.
A million dollars might not seem like much in today's economy, but it's still a substantial sum that many people won't be able to accumulate. However, it's not as unattainable as it may initially appear. Here's a breakdown of how ordinary earners can reach that goal within their lifetime, and the simplest method to achieve it. The previous instance of Nvidia's "Double Down" signal in 2009 has resurfaced, with a similar signal now flashing for a company that's 1/100th the size of Nvidia.
Now, let's focus on the second aspect – the easiest way to amass a $1 million portfolio. To achieve this, you'll need significant growth, which can only be achieved through stocks. However, investing in individual stocks can be complex and demanding. The simplest approach is to invest in a hands-off, diversified index fund like the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
Assuming the S&P 500 Index maintains its average return, you can expect an average annual gain of around 10%. With $500,000 and a 10% average annual return, you could reach $1 million in just eight years. Starting with only $100,000 would take approximately 25 years. If you begin from scratch and contribute monthly, 30 years with $450 per month or 34 years with $300 per month would suffice.
Alternatively, $1,000 per month would get you to $1 million in around 23 years. These figures are merely estimates, and you should use a growth-projection calculator to determine your specific scenario. The crucial takeaway is that it doesn't require a large sum of money to have a chance at becoming a millionaire. The most important factor is to start as early as possible, as time will handle most of the work, even with modest contributions.
This might mean giving up small luxuries like weekly dining out or taking on a part-time job to generate additional income. While it may seem worth it for a more comfortable retirement, the Motley Fool and James Brumley have no interest in any of the mentioned stocks.
Written by urgent.news from Yahoo Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
