Can You Retire a Millionaire With ETFs Alone? | The Motley Fool
Most of us would like to become millionaires, but it can seem impossible unless you are a stock market genius or lucky casino frequenter. That's not the case, though. As long as you have enough time before you retire, it's possible to amass surprisingly large sums -- even a million dollars or more.
Better still, this can be done very simply, such as by only investing in a broad market index fund. Since many exchange-traded funds (ETFs) exist that track many different stock market indexes, you can achieve millionairehood via ETFs.
The proof of how much money you can amass over time is in the math -- reflected in the table below. Much depends on how long you invest and on how much money you invest regularly. The bolded numbers below show the points at which you might cross the millionaire line when you're saving various sums for various periods.
The table uses an 8% annual growth rate, and that's an attempt to be somewhat conservative. Over long periods, the average stock market return has been roughly 10%, but an investor might average a little or a lot more or less depending on the specific period in which they invest.
So which specific ETFs can help you amass significant wealth? Well, there are lots of great low-cost ETFs that are passively managed index funds, and fund companies such as Vanguard, Fidelity Investments, and Schwab. Here are a handful of solid contenders that encompass much or all of the U.S. or world stock market:
The following ETFs focus on companies of certain sizes:
Finally, here are some ETFs that have particularly strong performances over the past 10 and 15 years. That's not necessarily guaranteed to continue, so be sure to read up on any of them before investing in them, to make sure you like what you see and that you're confident in their promise.
If you end up invested in one or more ETFs that grow significantly faster than the overall market, you may become a millionaire even faster than if you just stick with an S&P 500 or world market ETF. But even those very broad ETFs have very respectable records and are likely to be solid performers over the coming decades.