
2 Vanguard Index Funds That Could Turn $100K Into $1 Million in 30 Years
If you're looking for a reliable, long-term way to grow your wealth, investing in index funds might be the answer—and two Vanguard index funds could be the key to turning $100,000 into $1 million over the next 30 years.
Vanguard, a major player in the world of low-cost exchange-traded funds (ETFs), offers options that allow investors to passively grow their wealth by tracking the performance of diversified market indexes. Among the most popular options are the Vanguard S&P 500 ETF (VOO) and the Vanguard Russell 2000 ETF (VTWO). Together, these funds provide a mix of large-cap and small-cap stocks, offering both stability and growth potential.
Imagine this: If you had invested $100,000 in these two ETFs 30 years ago—$50,000 in each—you would now be sitting on a portfolio worth approximately $1.7 million. That’s the power of long-term investing in these robust indexes, and the best part is that you don’t need to be an expert in picking individual stocks to get similar results. All you need is the discipline to stay invested.
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The Vanguard S&P 500 ETF tracks the performance of the 500 largest companies in the U.S., representing sectors from tech to healthcare. With these companies being some of the most profitable and resilient in the world, this fund offers a strong foundation for any investor. In fact, the S&P 500 has historically delivered an average annual return of 10.58%, which, when compounded over 30 years, could turn your $50,000 investment into over $1 million.
On the other hand, the Vanguard Russell 2000 ETF focuses on smaller companies, those with a market cap less than $2 billion. This index is known for its potential to deliver higher growth, albeit with a bit more volatility compared to large-cap stocks. Over time, the Russell 2000 has averaged an annual return of 7.96%, which could turn your $50,000 investment into nearly $500,000.
These returns assume that the ETFs continue to perform in line with their historical averages, and the best part is that they offer a low-cost option for investors looking to build wealth without the need for constant market monitoring. The Vanguard S&P 500 ETF has an expense ratio of just 0.03%, which means you’re not paying a high fee to track this proven index. The Russell 2000 ETF, though slightly higher at 0.1%, still remains a cost-effective choice for those seeking exposure to small-cap stocks.
If you’re starting with $100,000 today, investing $50,000 into each of these funds could give you the potential to become a millionaire over the next three decades. Of course, like any investment, there are no guarantees, but if history repeats itself, you could see your money grow significantly, providing both financial security and the opportunity for future prosperity.
In a world full of fast-paced stock picks and market predictions, Vanguard’s S&P 500 and Russell 2000 ETFs offer a clear path to wealth creation through time and patience. By embracing the power of long-term, passive investing, you could watch your initial $100,000 grow into a $1 million nest egg.
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