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Can You Retire a Millionaire with ETFs Alone?

By Selena Maranjian – Sep 14, 2021 at 5:21AM

Key Points

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The answer is yes.

Stock investing can be time-consuming and difficult, requiring you to spend hours reading about lots of companies, evaluating their financial statements, and deciding which ones to invest in and when to buy -- and eventually, sell -- the shares. Thus, many people turn to professionally and actively managed mutual funds, or to the typically far less costly yet arguably better index funds, which come in mutual fund and exchange-traded fund (ETF) forms. ETFs have been growing in popularity due to how easy it is to get in and out of the stock-like funds.

So... can you get by in your investing life sticking mainly or entirely to ETFs? You sure can -- and they can even help you retire a millionaire. Read on.

A person is holding fanned out money in front of half her face.

Image source: Getty Images.

What are ETFs?

There's a lot to like about ETFs. They're technically funds (thus the "F" in their acronym), but they trade like stocks on exchanges such as the New York Stock Exchange or the Nasdaq. As funds, each share will distribute your money across multiple assets -- perhaps hundreds or thousands of stocks -- offering easy diversification.

Unlike mutual funds, which might require you to spend a minimum of several hundred or thousand dollars on their shares, you can buy as little as a single share of an ETF. Indeed, you may even be able to buy a fraction of a share, via some good brokerages.

Consider index-fund ETFs

Many ETFs are index funds, tracking the performance of a particular index (such as the S&P 500) by owning most or all of what the index contains, in similar proportions. For most of us, it's hard to beat index funds as investments, because good, low-cost index funds are an easy way to invest in stocks and enjoy solid returns over the long run.

The long-term average annual return of the stock market is close to 9% or 10%, and a broad index fund that tracks the overall market will deliver returns roughly the same as the market. The table below shows how you might arrive at millionairehood earning an average rate of 8% over long periods:

Growing at 8% for

$10,000 Invested Annually

$15,000 Invested Annually

$20,000 Invested Annually

5 years




10 years




15 years




20 years




25 years




30 years




Data source: Calculations by author.

What are some good ETFs to consider?

Here are some good low-cost index-fund ETFs:


Focused on

Vanguard S&P 500 ETF (VOO)

The 500 large-cap companies in the S&P 500

Vanguard Large-Cap ETF (VV) 

Large-cap companies

Schwab U.S. Large-Cap ETF (SCHX)

Large-cap companies

Vanguard Mid-Cap ETF (VO)

Mid-cap companies

Schwab U.S. Mid-Cap ETF (SCHM)

Mid-cap companies

Vanguard Small-Cap ETF (VB)

Small-cap companies

iShares Core S&P Small-Cap ETF (IJR)

Small-cap companies

Schwab U.S. Broad Market (SCHB)

The U.S. stock market

iShares Core S&P Total US Stock Market (ITOT)

The total U.S. stock market

Vanguard Total Stock Market ETF (VTI)

The total U.S. stock market

Vanguard Total World Stock Market ETF (VT)

The total world stock market

Vanguard FTSE All-World ex-US ETF (VEU)

The total world stock market -- excluding U.S. stocks

Data source:

A road sign says millionaire next exit.

Image source: Getty Images.

Note that there is a wide variety of index funds out there, and that the ones above are a small (but respectable) selection. Some will have your money focused mainly on small companies, which are able to grow more quickly (though they don't always do so), while others focus only on large companies, which can be more stable and can offer meaningful dividend yields (though they don't always do so). You might distribute your money across a handful of funds, or you could do perfectly well with just one or two very broad-focused ones.

Here are a few more ETFs to consider, that can give your portfolio exposure to real estate, bonds, dividends, and more:


Focused on

Vanguard Real Estate ETF (VNQ)

Real estate

Schwab U.S. Aggregate Bond ETF (SCHZ)

The U.S. bond market

Vanguard Dividend Appreciation ETF (VIG)

Companies with growing dividend payouts

Vanguard Growth ETF (VUG)

Growth stocks

Vanguard Value ETF (VTV)

Value stocks

Invesco QQQ Trust ETF (QQQ)

The Nasdaq 100 Index of 100 non-financial (and largely tech) stocks


However you go about it, consider including some or many ETFs in your portfolio -- they can definitely help you become a millionaire by retirement.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Vanguard Dividend Appreciation ETF, Vanguard Growth ETF, Vanguard Mid-Cap ETF, Vanguard REIT ETF, Vanguard S&P 500 ETF, Vanguard Small-Cap ETF, Vanguard Total Stock Market ETF, Vanguard Value ETF, and iShares S&P SmallCap 600 Index. The Motley Fool has a disclosure policy.

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