Getting rich in the stock market?

Categories Lessons, Making Money

Here is the easiest way to get rich investing in the stock market: invest as much as you can, as often as you can, put your money in an S&P 500 index fund, wait 40 years. You will likely be rich.

This is not a get rich quick scheme; too many people fail at that. Unless you really know what you are doing, you shouldn’t buy individual stocks. There’s no need to buy managed funds; 99% of fund managers have underperformed the market.

The S&P 500, over the past 50 years, has returned 9.7% (including dividends.)

If you invest $1,000 every year in the S&P 500, assuming that 9.7% annual return:

  • after 10 years, you will have $17,000
  • after 20 years, you will have $60,000
  • after 30 years, you will have $170,000
  • after 40 years, you will have almost $450,000

That’s just $1,000 a year, if you can invest more, you will likely have more. Assuming you could invest $10,000 every year, you would have 10 times as much:

  • after 10 years, you will have $170,000
  • after 20 years, you will have $600,000
  • after 30 years, you will have $1,700,000
  • after 40 years, you will have almost $4,500,000

Don’t overthink this. It’s really this easy. Some years you may lose money. IN 2008, the S&P 500 dropped 37%. That’s tough to swallow. You may want to sell your investments. Try your best to resist that. If anything, if you have extra cash, you could invest more when the market declines, but I’d suggest not trying to time the market. Simply invest as much as you can, every year. Over the long haul, the markets tend to grow along with the economy.

Keep it simple. Invest regularly. Eventually you will be rich.

But why be rich when you are old?

Build your businesses. Get rich young.

Getting rich quick doesn’t really happen to most people but if you target to get rich young, it can be achieved.

Get Started.

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