Most investors focus on trying to find the market's next big winners. It may be the more exciting way to approach your investing strategy, but in most cases it's not the most successful. The better way to build wealth over time is usually building your portfolio brick by brick.
By steadily and consistently putting money away in the Vanguard S&P 500 ETF (VOO +1.60%), investors have a clear path to building a $1 million portfolio if they can stick with it.
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Key takeaways
- The Vanguard S&P 500 ETF has an expense ratio of just 0.03%, making it one of the cheapest ways to own the largest U.S. companies.
- Over the past 10 years, VOO has an average annual return of 14%. The longer-term return for U.S. stocks is closer to 10% per year.
- Investing $500 per month at an average annual return of 10% can grow to $1 million in just over 30 years.
- Dollar-cost averaging and avoiding the temptation to trade short-term have historically rewarded patient investors who ride out volatility.
Why the S&P 500 is one of the best long-term investment options
When you're building up the core of your portfolio, you want to look for investments that are durable, proven, and have the balance sheet strength to ride out different economic cycles. The companies of the S&P 500 are just that.
Plus, they represent all areas of the U.S. economy, including tech, healthcare, energy, and financial services. That type of diversification not only helps to generate more consistent revenue and earnings growth overall, it helps to reduce some of the volatility that comes from any one segment of the market underperforming.
NYSEMKT: VOO
Key Data Points
To be fair, diversification hadn't been in vogue lately, although that changed in 2026. Tech and growth stocks were about the only areas of the market outperforming. A lot of people went chasing after these stocks and are now overweight them in their portfolio.
But 2026 provides us a good reminder that the stock market almost always rotates eventually. Sectors and themes go in and out of favor. Instead of trying to pick winners and losers or trying to time the market with active trading, it's often better to just own the whole basket and let the long-term power of compounding do the work for you.
The path to $1 million: What different monthly amounts can grow to
Here's a practical look at how different levels of monthly investment and rates of return affect how long it takes to reach $1 million.
| Monthly contribution | 8% annual return | 10% annual return | 12% annual return |
|---|---|---|---|
| $300/month | ~40 years | ~35 years | ~30 years |
| $500/month | ~35 years | ~31 years | ~26 years |
| $1,000/month | ~28 years | ~24 years | ~20 years |
| $2,000/month | ~22 years | ~18 years | ~15 years |
Estimates are approximate and assume consistent monthly contributions with no starting balance. Past performance does not guarantee future results.
Obviously, the lower your return and the less you contribute, the longer it will take to earn the title of millionaire. In general, it's better to use more conservative assumptions about expected returns. That's the great unknown and is completely out of anyone's control.
You can, however, control how much you invest. The more you invest, the less reliant you become on high returns to get you to the $1 million mark.
How much you're able to invest depends largely on your income and your discipline level. But getting to a $500 monthly contribution might not be as intimidating as it seems.
If, for example, you earn $4,000 a month (or $48,000 annually), save 10% of your income in a 401(k) plan and get a 2% company match, you're at $480 right there. The more you're able or willing to save, the faster you can hit $1 million.
The important thing is just to get started. Even a much smaller monthly investment can get you to seven figures, given enough time. The key is consistency. Contributing monthly and letting it grow untouched is the best path to long-term wealth creation.
