The magic of compound investing: A get rich slow scheme
Ever wonder why almost all respectable institutions and legendary investors like warren buffet tell you to invest in ETFs (Exchange traded funds) with disposable income after expenses? The reason why is because it works!
Investing in simple ETFs like $QQQ and $SPY (which return on average 8-10% per year) could potentially generate millions over the span of a few decades, it all depends on how much you put in at the beginning. For instance, lets run a simulation: Imagine you are 20 years old, and you have $1000 in your savings and can afford to spend an additional $250 per month into ETFs. By the time you're 67 (the "government defined" retirement age*) you could potentially have $2,014,373!
It can get even crazier the more you are able to put in per month. For instance, if you put $500 every month you would have 3.971 million! Even accounting for likely inflation in the future you are still left with millions.
Yes, this won't make you rich overnight, but it WILL with almost 100% certainty never lose you money over a long enough period. No one in the history of ETFs in the S&P 500 ($SPY) and NASDAQ ($QQQ) have lost money over a period of 20 years or longer. So even if the market traded sideways for 47 years (which is unlikely) you would still have hundreds of thousands for retirement because you put away money each month!
It is a much safer investment than trying to invest in individual stocks if you don't have much market knowledge or want a safe bet for retirement. However, please note I am not a financial advisor and make sure you do some research on ETFs before investing! However, I will tell you that most respected and trusted investors and financial advisors say $QQQ and $SPY are the safest ETFs out there.
*When seniors born after 1960 receive full Social Security benefits
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