In This Article:
Key Points
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The Vanguard Russell 1000 Growth Index Fund ETF is a diversified growth fund that has beaten the market over the past 10 years.
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Investing in this exchange-traded fund every month can enable investors to grow their portfolio while keeping their overall risk low.
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If you want to retire a millionaire, there are many ways to do so, without having to take on significant risk. Even if you don't have a boatload of money to invest in the stock market today, simply adding to your position over time with regular monthly investments can lead to significant returns in the long run.
Investing in top exchange-traded fund (ETF) can be a low-risk strategy to deploy that can put you on a path to growing your portfolio to $1 million -- and potentially higher -- by the time you retire. Here's how investing $250 a month can set you up for a much more enjoyable retirement.
Invest in a top Vanguard fund that's focused on growth
Vanguard ETFs typically come with low fees, have excellent diversification, and can make for solid long-term investments. The Vanguard Russell 1000 Growth Index Fund ETF (NASDAQ: VONG) is an excellent example of an ETF that you can safely put money into on a regular basis.
It has a modest expense ratio of just 0.07% and holds nearly 400 stocks. It focuses on growth and tracks the Russell 1000 Growth Index.
Tech is a major part of this ETF, accounting for over 56% of its total holdings. The next-largest sector, consumer discretionary, makes up just 19%.
As a result, there will be some volatility from one year to the next, but overall, the long-term trajectory should be a strong one. Over the past decade, the fund has outperformed the S&P 500 by a wide margin.
Past results don't predict the future, but the ETF's focus on growth stocks should make it an ideal fund to invest in over the long term, since it may be in a good position to outperform the broader markets.
How a monthly $250 investment could grow to over $1 million
If you're patient and continually invest $250 per month into the ETF, you could end up with a portfolio worth over $1 million. There are no secrets involved, it's just a matter of simply compounding your gains over the long haul.
Here's how your portfolio's value could grow, assuming you average an annual return of 10%, which is in line with the S&P 500's long-run average.
| Portfolio Balance Assuming a $250 Monthly Investment | |
|---|---|
| Year | 10% Annual Growth |
| 30 | $569,831 |
| 31 | $632,668 |
| 32 | $702,084 |
| 33 | $778,769 |
| 34 | $863,484 |
| 35 | $957,069 |
| 36 | $1,060,454 |
| 37 | $1,174,665 |
| 38 | $1,300,836 |
| 39 | $1,440,218 |
| 40 | $1,594,195 |
Calculations and table by author.