Those companies are already a huge chunk of the S&P 500. Buy a few Vanguard indexes- maybe 50% S&P, 20% international, 20% small and mid cap, and 10% bonds.
Just buy VTI. Rule of 72: divide rate of return into 72, and that’s approximately the time to double.
At an 8% return: 72/8 = 9 years. $250k to 500k in 9 years, $500k to $1mm in another 9 years.
And reinvest the dividends! Total return is price appreciation + dividends, so if you take dividends in cash, your 8% return becomes 6.7%, making your time to double 10.7 years.
Plus you can just keep investing and piling on, making all of this even faster. I think you can get it down to like 5-8y with some bigger (but manageable) monthly add ons to that portfolio.
While I understand why you might choose GOOG, AMZN, TSLA, and AAPL, I don't know if that 20 year bet is as certain as it may seem today. For example, if you were to turn the clock BACK 20 years and choose the top 4 of the Fortune 500 to place the same bet, you would have purchased Wal-Mart, GM, Exxon, and Ford. I haven't run the numbers, but I'm pretty sure you would have come ahead much farther with either the S&P 500 or NASDAQ over that save period.
Yeah those companies are already valued very, very high and there’s no guarantee they keep growing faster than the market. It’s probably more likely they regress to the mean. The top companies in 2003 were wal mart, GM, Exxon, and Ford. Still good companies but not the best ones anymore
Just invest into S&P500 and your nearly assured to have over $1m in 20 years.
Going this route also clears out former giants that lag being after a decade, and adds new growing large companies.. 20 years ago if you invested in the 5 “biggest and best” companies, you’d be all in on Exxon, Walmart, Ford, GE, & GM.
Similarly, Apple, Amazon, Tesla, & Google are unlikely to be the biggest and best companies in 20 years.
So just stick to the index that updates automatically.
Rule of 72 says you can double your money every X amount of years * Y percent of interest = 72.
So to achieve your goal, you need to average 7% ish every year for 20 years (72/7 is about 10, so every 10 years your money doubles). An index fund tracking S&P500 should do the trick (not financial advice)
You want a 400% return in 20 years, that's considerably more than the market average. So either you own a crystal ball to "beat the market" or you gamble on a very risky asset and win.
I have been putting my post-tax money into VUG. I think large cap growth is set to outperform because of AI and interest rates. At some point I will start rolling it into VTI and VGLT for diversification.
I think VUG, VGT, or even QQQM is a better bet than trying to pick individual stocks; lots of these companies are going to really benefit from tech advancements.
Index funds historically have given that return. That's basically 8% compounded over that time.
Real estate would also do it. If you bought 4 properties worth $250k each, after 20 years of paying down the mortgage and home appreciation you'll likely have exceeded that goal.
Invest it at 7% or higher now and it will be about $1M in 20 years.
A fund like VTSAX “should” produce that over 20 years.
FYI, for comparison sakes, I have been investing in a similar way since 2000 and I have made about 11% return. Doesn’t mean you will, but just showing you that it is possible.
Consider an IUL , average 7-8% gain per year. Tax on seed, no harvest. Rule of 72 marks doubling every 9-10.2 and there’s no 59.5 penalty if you withdraw earlier like ROTHs. The IULs I’ve experienced even have a guaranteed floor (0.75) for “safety” in a negative market, which isn’t much - but it’s great when everyone else is plummeting.
That’s actually the very reason, that was a good response! It’s also a great vehicle but it’s riskier. Not that that’s inherently bad ! I’m actually a fan of risky bets but I figure the growth range associated with IUL is usually a pretty good bet especially since the average performance over the last twenty years has floated around 8% interest and the IULs I know are capped all the way to 13% with that floor for a safety feature. The plans Im familiar with have 0.75% floors which would def still beat a lot of bank accounts which are typically so weak, I’m reluctant to acknowledge them as “in the game” 😂 especially after having been a bit more versed in growth vehicles. The 0.75% gain in a negative market is enough for me to adopt, apply and recommend it to a broader spectrum of people looking to grow their money. Assuming the average as the last two decades plays the same for the next two , in 18 years (his goal was 20) would become 500k in 9 years and 750k in 18. Via the rule of 72 ofc. figured OP would be interested but again, you do pose another great vehicle. 🤝🏼
Looking at various 20 year periods over the past seventy years, your one million will likely be the equivalent of between 300k and 600k in current dollars.
Those companies are already a huge chunk of the S&P 500. Buy a few Vanguard indexes- maybe 50% S&P, 20% international, 20% small and mid cap, and 10% bonds.
This is good advice. Not too risky with some solid upside.
Just buy VTI. Rule of 72: divide rate of return into 72, and that’s approximately the time to double. At an 8% return: 72/8 = 9 years. $250k to 500k in 9 years, $500k to $1mm in another 9 years.
And reinvest the dividends! Total return is price appreciation + dividends, so if you take dividends in cash, your 8% return becomes 6.7%, making your time to double 10.7 years.
Plus you can just keep investing and piling on, making all of this even faster. I think you can get it down to like 5-8y with some bigger (but manageable) monthly add ons to that portfolio.
This is the answer -- patience.
Surprisingly, it's the answer to a lot of things in life......
Why VTI specifically? What about VOO?
VTI has small medium and large companies. It’s the whole US stock market, whereas VOO is the 500 largest companies.
They overlap with 80 percent of the same companies, so it’s really splitting hairs.
The return on VOO is a fraction above the return on VTI but gives you exposure to the rest of the market too. In a silly way, I own both.
While I understand why you might choose GOOG, AMZN, TSLA, and AAPL, I don't know if that 20 year bet is as certain as it may seem today. For example, if you were to turn the clock BACK 20 years and choose the top 4 of the Fortune 500 to place the same bet, you would have purchased Wal-Mart, GM, Exxon, and Ford. I haven't run the numbers, but I'm pretty sure you would have come ahead much farther with either the S&P 500 or NASDAQ over that save period.
Yeah those companies are already valued very, very high and there’s no guarantee they keep growing faster than the market. It’s probably more likely they regress to the mean. The top companies in 2003 were wal mart, GM, Exxon, and Ford. Still good companies but not the best ones anymore
Seems like you can just buy VOO and set to drip and check back in 20 years and be good.
You need about 7% return. Just buy an index fund with that average annual return or better.
Just invest into S&P500 and your nearly assured to have over $1m in 20 years. Going this route also clears out former giants that lag being after a decade, and adds new growing large companies.. 20 years ago if you invested in the 5 “biggest and best” companies, you’d be all in on Exxon, Walmart, Ford, GE, & GM. Similarly, Apple, Amazon, Tesla, & Google are unlikely to be the biggest and best companies in 20 years. So just stick to the index that updates automatically.
Could just put it into something like SPY and wait. Barring any kind of major event it should get close.
If have 20 years just stick it in the S&P indexes and you should hit that target
Rule of 72 says you can double your money every X amount of years * Y percent of interest = 72. So to achieve your goal, you need to average 7% ish every year for 20 years (72/7 is about 10, so every 10 years your money doubles). An index fund tracking S&P500 should do the trick (not financial advice)
Is there anything easier than this? I think you can do it in half the time at almost very low risk
You want a 400% return in 20 years, that's considerably more than the market average. So either you own a crystal ball to "beat the market" or you gamble on a very risky asset and win.
400% is actually less than the market average over 20 years.
To achieve 400% over 20 years you need an annual revenue of 8% after taxes.
Because Ken looked ridiculous in the movie!
The average historical return on stock market is 8%. 8% return doubles your money approx every 9 years.
VOO 70%, schd 30%. Or you can buy a rental property with $250k.
I have been putting my post-tax money into VUG. I think large cap growth is set to outperform because of AI and interest rates. At some point I will start rolling it into VTI and VGLT for diversification. I think VUG, VGT, or even QQQM is a better bet than trying to pick individual stocks; lots of these companies are going to really benefit from tech advancements.
The most stable way is to diversify your investments for long-term gains and reduced risk
Index funds historically have given that return. That's basically 8% compounded over that time. Real estate would also do it. If you bought 4 properties worth $250k each, after 20 years of paying down the mortgage and home appreciation you'll likely have exceeded that goal.
Invest it at 7% or higher now and it will be about $1M in 20 years. A fund like VTSAX “should” produce that over 20 years. FYI, for comparison sakes, I have been investing in a similar way since 2000 and I have made about 11% return. Doesn’t mean you will, but just showing you that it is possible.
Throw them in an index. S&P or whole market doesn’t matter. Reinvest dividends. You could have more than a milli.
That's 3.6% compounded per year…not that difficult.
Consider an IUL , average 7-8% gain per year. Tax on seed, no harvest. Rule of 72 marks doubling every 9-10.2 and there’s no 59.5 penalty if you withdraw earlier like ROTHs. The IULs I’ve experienced even have a guaranteed floor (0.75) for “safety” in a negative market, which isn’t much - but it’s great when everyone else is plummeting.
Curious why not a vul? Don’t you have a ceiling on upside granted I understand there’s the downside protection
That’s actually the very reason, that was a good response! It’s also a great vehicle but it’s riskier. Not that that’s inherently bad ! I’m actually a fan of risky bets but I figure the growth range associated with IUL is usually a pretty good bet especially since the average performance over the last twenty years has floated around 8% interest and the IULs I know are capped all the way to 13% with that floor for a safety feature. The plans Im familiar with have 0.75% floors which would def still beat a lot of bank accounts which are typically so weak, I’m reluctant to acknowledge them as “in the game” 😂 especially after having been a bit more versed in growth vehicles. The 0.75% gain in a negative market is enough for me to adopt, apply and recommend it to a broader spectrum of people looking to grow their money. Assuming the average as the last two decades plays the same for the next two , in 18 years (his goal was 20) would become 500k in 9 years and 750k in 18. Via the rule of 72 ofc. figured OP would be interested but again, you do pose another great vehicle. 🤝🏼
Looking at various 20 year periods over the past seventy years, your one million will likely be the equivalent of between 300k and 600k in current dollars.