Becoming a multimillion dollar investor is easier than you might think. You don’t need to know all the ins and outs of the stock market or have a lot of money to invest. All you need is a strategy.
Investing in growth ETFs can be a smart move to maximize your earnings. A growth ETF is a set of stocks with potential for rapid growth. They tend to present a greater risk than broad market funds, such as S&P 500 index funds. However, they generally see higher returns.
Not all growth ETFs are created equal. These three, in particular, have above-average rates of return and can help you achieve multi-millionaire status.
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1. Vanguard Growth ETF (VUG)
THE Cutting-edge growth ETF (NYSEMKT: VUG) contains 257 shares of high growth companies. Some of the fund’s largest companies include Apple, Microsoft, Amazonand the parent company of Google Alphabet.
Since its creation in 2004, this ETF has achieved an average annual rate of return of 11%. At this rate, here’s how you can become a multimillionaire:
- Invest $ 500 per month for 35 years = $ 2 million in total savings
- Invest $ 900 per month for 30 years = $ 2.2 million in total savings
- Invest $ 300 per month for 40 years = $ 2.1 million in total savings
It takes time to accumulate a significant amount of money with ETFs, but that patience will be worth it. Also remember that these investments require very little maintenance. All you need to do is invest consistently, then sit back and wait for your investments to grow.
2. Vanguard Information Technology ETF (VGT)
As the name suggests, the Vanguard Information Technology ETF (NYSEMKT: VGT) contains actions in the area of information technology. Includes 345 shares of companies like Apple, Microsoft, NVIDIA, and Visa.
This fund carries a little more risk than the ETF Vanguard Growth because it contains only shares in one sector. However, it has also achieved higher returns of 13% per year since its inception in 2004. At this rate, here’s how you can become a multimillionaire:
- Invest $ 300 per month for 35 years = $ 2 million in total savings
- Invest $ 600 per month for 30 years = $ 2.1 million in total savings
- Invest $ 200 per month for 40 years = $ 2.4 million in total savings
The more you are able to invest and the longer the term, the more you can earn. For example, if you could invest $ 600 a month for 40 years, earning an annual return of 13%, you could potentially save an incredible $ 7.3 million.
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3. ARK Fintech Innovation ETF (ARKF)
THE ARK Fintech Innovation ETF (NYSEMKT: ARKF) it is a type of high-risk, high-reward investment. It usually has between 35 and 55 shares, so it does not offer as much diversification as the other two funds.
It also contains only fintech stocks, which are generally more risky, but also have greater potential for reward. Some of the fund’s largest companies include Square, PayPal, and Zillow. The fund is also younger than the others on the list as it was created in January 2019.
That said, he experienced a remarkable couple of years. Since its creation, it has achieved an impressive annual rate of return of 62%. Here’s what you need to save to become a multimillionaire:
- Invest $ 100 per month for 15 years = $ 2.6 million in total savings
- Invest $ 400 per month for 12 years = $ 2.5 million in total savings
- Invest $ 50 per month for 17 years = $ 3.5 million in total savings
Of course, it is unrealistic to expect a 62% return year after year. But even if you were earning returns of, say, 20% per year, you could still achieve savings of $ 2 million if you invested around $ 350 per month for 25 years.
Again, this fund is the riskiest on the list. Only invest in this fund if you have a relatively high tolerance for risk and make sure you have a well diversified portfolio to use if this ETF is not performing as expected.
Becoming a multimillion dollar investor is possible, but you will need a strategy. By investing in the right places and being patient as your money grows, you will be well on your way to getting rich in the stock market.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.