We publish a lot of articles on how you might become a millionaire -- and it's true, you could become a millionaire. But young people can aim much higher than that: They could become multimillionaires, because they have a lot more time in which their money can grow for them.

Here's a look at a handful of investments that have a lot of room to grow over the coming decades. See if you want to recommend any to your kids or grandkids. It's rarely too early to get your kids investing and on the path to smart money management.

Two kids smile as they handle money and sit next to some canvas money bags.

Image source: Getty Images.

How money grows

First, though, here's a review of how money grows, because it's important to understand what's possible:

Growing at 8% for

$6,000 invested annually

$12,000 invested annually

5 years

$38,016

$76,032

10 years

$93,873

$187,746

15 years

$175,946

$351,892

20 years

$296,538

$593,076

25 years

$473,726

$947,452

30 years

$734,075

$1,468,150

35 years

$1,116,613

$2,233,226

40 years

$1,678,686

$3,357,372

50 years

$3,718,030

$7,436,061

Calculations by author via moneychimp.com.

See? Multimillionaire status is possible! It does take time, though. If your kid or grandkid is, say, 10, they have 50 years until they turn 60, which is a somewhat early age at which they might retire.

For compounding to do amazing work, you need three things: time, meaningful investments, and a good growth rate. Simply investing in the S&P 500 can be all you need. Over many decades, it has averaged annual returns close to 10%. I've been a little more conservative in the table above because 10% average returns are not guaranteed.

Here, then, are some investments to consider. I'm focusing on exchange-traded funds (ETFs) here, because they're very much stock-like, while also being funds. They trade like stocks, but each of these is invested in an array of companies, offering instant diversification.

1. A simple S&P 500 index fund

A low-fee S&P 500 index fund is hard to beat, and even Warren Buffett has recommended it for most people. It will immediately have you invested in 500 of America's biggest companies -- including all of the "Magnificent Seven" -- which are Apple, Amazon, Google parent Alphabet, Facebook parent Meta Platforms, Microsoft, Nvidia, and Tesla.

You might cast an even wider net by investing in an index fund that aims to deliver the performance of the total U.S. stock market, or one that tracks the total world stock market. Here are three solid broad-market index funds to consider:

  • Vanguard S&P 500 ETF (VOO -0.06%)
  • Vanguard Total Stock Market ETF (VTI 0.04%)
  • Vanguard Total World Stock ETF (VT 0.06%)

The Vanguard S&P 500 ETF has averaged annual gains of about 13% over the past decade, and 16.2% over the past five years.

2. A growth-oriented broad index fund

If you want to aim for a little faster growth, consider the Vanguard Growth ETF (VUG -0.17%). It tracks the CRSP U.S. Large Cap Growth Index, which is focused on faster-growing large companies. It recently held 166 stocks, with about half of them in the technology sector and close to 27% divided between the consumer cyclical and communication services sectors.

Over the past decade, this ETF has averaged annual gains of 15.5% -- and 17.3% over the past five years.

3. A powerful technology ETF

To aim for even fatter returns (while accepting more risk), consider one or two ETFs such as the Technology Select Sector SPDR ETF (XLK 0.11%). It recently held 69 stocks, involved in businesses such as semiconductor equipment, internet software and services, IT consulting services, computers, and peripherals. Over the past decade, this ETF has averaged annual gains of 20.3%, and 20.2% over the past five years.

Note, though, that when market downturns happen, as they occasionally do, high-flying growth stocks such as those in ETFs such as these may drop sharply in value -- often recovering eventually.

Keep in mind

As you aim to help your grandkids (or kids) become multimillionaires, here are some things to keep in mind:

  • Whether you're buying into one of these ETFs or some stocks, buy to hold. That means you keep an eye on the investments, in case some situation develops where selling might be smart. With these broad funds, though, holding for decades is more likely to be safe and effective.
  • Note, too, that the amount invested every year matters a lot. Young people may only manage, say, $100 or $500 per month. But as they grow and enter the workforce, it's important to keep investing and to invest more each year, as they're able. Their earliest invested dollars are the most powerful, as they have the most time in which to grow. They may need to take some of this money out for school or a down payment, but it's good to keep as much as they can growing for their far-off futures.
  • It's also vital to keep inflation in mind. We might think that retiring with $2 million can put us on easy street, but in 50 years, that sum might have the purchasing power of only $400,000 or so. Thus, for best results, young people should aim to invest aggressively. At some point, perhaps as they approach and enter middle age, they may find that their portfolios have grown enough to fund a comfortable retirement. At that point they might just retire, or keep saving and investing, but with a little less urgency.

So do your young loved ones a favor, and give them a nudge in the direction of financial independence.