You want to make a lot of money, right? And you would like to do it quickly and easily, too, I bet. Getting rich quick isn’t easy or reliable, but it can certainly be easier given enough time.
One way is to invest in a low-fee, broad-market index fund. An S&P 500 index fund is a strong option, but consider going even wider, with the Vanguard Total Stock Market ETF (NYSEMKT: VTI). It will spread your dollars across most of the U.S. stock market, including large, small, and medium-size companies — more than 3,500 of them, in total.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
How might your money grow?
No one can know how much your money will grow in the Vanguard Total Stock Market ETF, but we can make educated guesses.
Consider, for starters, that the stock market has averaged annual returns of close to 10% over many decades. And the Vanguard exchanged-traded fund has averaged annual gains of 9.5% since its inception in 2001, just about 25 years ago.
So let’s assume average annual gains of 9% (to be a bit conservative), and we’ll also assume that you invest $6,000 annually in the ETF (that’s $500 per month). In 25 years, this investment will grow to $508,205. That’s pretty good, right? Keep in mind that:
-
The stock market might average a higher or lower growth rate over the coming years.
-
You might amass more than $1 million if you invest $1,000 per month, or $12,000 annually.
-
You can consider other strong long-term investments, too, such as dividend-focused ETFs and growth ETFs. (Remember that growth stocks can be particularly overvalued at times and can retract more sharply during a market pullback. But if you hang on through thick and thin, you will likely do just fine.)
The Vanguard Total Stock Market ETF may serve you well if you’re worried about a market pullback coming this year, because it’s not just full of exciting growth stocks. It also encompasses moderately valued, slower growers. It even has a modest 1% dividend yield. Give it a closer look.
Should you buy stock in Vanguard Total Stock Market ETF right now?
Before you buy stock in Vanguard Total Stock Market ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
