Can Buying the Vanguard S&P 500 ETF Make You a Millionaire?

Buying an exchange-traded fund (ETF) that tracks an index like the S&P 500 can be a great way to build long-term wealth, and this strategy is endorsed by some of the world's top investors, including Warren Buffett. The Vanguard S&P 500 ETF (VOO 0.84%) is one of the most popular funds on the market because of its super low cost, and it could certainly make you a millionaire with regular contributions and the right time horizon.

Below, I'll break down the components of the Vanguard S&P 500 ETF and run through some possible pathways to the million-dollar club for regular investors.

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A diversified index with healthy exposure to high-growth trends

The S&P 500 might be the best American stock market index for building long-term wealth. It's home to 500 companies from 11 different sectors of the economy, and it has a strict entry criteria to ensure that only the highest-quality names make the cut. For example, companies need to have a market capitalization of at least $20.5 billion to qualify for inclusion, and the sum of their earnings (profits) must be positive over the most recent 12-month period.

By comparison, the Dow Jones Industrial Average holds a narrow portfolio of just 30 stocks, and the Nasdaq Composite is dominated by stocks in the tech and tech-adjacent industries.

The Vanguard S&P 500 ETF tracks the performance of the S&P 500 by holding the same stocks and maintaining similar weightings. Below is a breakdown of the 11 sectors in the ETF, including their weightings (the percentage of the fund's value which they represent) and some of the most notable stocks within them:

Data source: Vanguard. Sector weightings are accurate as of May 31, 2025, and are subject to change.

The reason the information technology sector has such a dominant weighting is because Nvidia, Microsoft, and Apple are the three largest companies in the world, with a combined market capitalization of $10.5 trillion. The S&P 500 (and by extension, the Vanguard ETF) is weighted by market cap, which means the largest companies in the index have a higher influence over its performance than the smallest.

Artificial intelligence (AI) has been a big driver of value for companies in the information technology sector over the last couple of years, but a growing number of companies in non-technology industries are also rapidly adopting it. They include Amazon, Tesla, Alphabet, Meta, Netflix, and Uber, which are using AI to supercharge their legacy businesses.

Simply put, the Vanguard S&P 500 ETF offers investors a high amount of exposure to the booming AI revolution, but with a very healthy splash of diversification thanks to sectors like financials, healthcare, industrials, and consumer staples, where companies are far less reliant on the technology.

Can the Vanguard S&P 500 ETF make you a millionaire?

The S&P 500 has delivered a compound annual return of 10.4% since it was established in 1957 (assuming all dividends were reinvested). It's important for investors to buy an S&P 500 ETF with low fees in order to unlock as much of that return as possible.

The Vanguard S&P 500 ETF has an incredibly low expense ratio of 0.03%, meaning an investment of $10,000 would incur an annual fee of just $3. Vanguard says the average fee charged by comparable funds in the industry is a whopping 25 times higher at 0.75%, which can dent investors' returns over the long run.

Based on a compound annual return of 10.4%, here's how long it would take investors to achieve millionaire status from three different starting positions (assuming no additional contributions):

Data source: Calculations by author.

But don't worry, investors who aren't sitting on a large pile of idle cash can still reach the millionaire's club with small but consistent contributions (these calculations assume a starting balance of zero):

Data source: Calculations by author.

It's important to remember that past performance isn't a good indicator of future results. However, a track record spanning almost seven decades inspires a lot of confidence, which is why S&P 500 index funds are so popular among regular investors and professionals alike. Plus, the S&P 500 is rebalanced once per quarter (four times per year), meaning a special committee removes companies that no longer fit its criteria and replaces them with more suitable candidates.

Maintaining exposure only to the highest-quality companies is a big reason the S&P 500 has maintained such strong returns over the long run. Moreover, as I highlighted earlier, the index has a high degree of exposure to high-growth segments of the economy like AI, which could supercharge its future returns.

Therefore, yes, buying the Vanguard S&P 500 ETF can make you a millionaire if you take a disciplined approach to investing and remain focused on the long term.