The Extremely Lazy Portfolio: Become A Millionaire By Buying 1 Share Of This ETF Every Month
Exchange Traded Funds (ETFs) have become immensely popular over the last twenty years. They provide passive investors with the ability to set it and forget it. For the vast majority of people, that is the best way to invest.
Not only do ETFs provide instant diversification by providing exposure to a wide range of underlying assets in a single investment, they also give investors flexibility as they can be bought and sold on an exchange like individual stocks.
Another pro of ETFs is they have generally lower expense ratios than actively managed mutual funds, making them a cost-effective option for long-term investors. But we all know that EFTs and other index funds are better than mutual funds, right?
ETFs also offer transparency as they disclose their holdings daily, allowing investors to understand exactly what they are investing in and make informed decisions about their portfolio.
The One-Fund Lazy Portfolio
There are many ways to invest in ETFs, and strategies to diversify — like a 3 fund lazy portfolio — but EFTs by nature are diversified. And if you have limited funds and want to invest in only one ETF, you would do well betting on SPY, which tracks the S&P 500, or VTI which tracks the entire market.
The historical average annual return of SPY over the last 15 years is 10.80%. While VTI has a 15 year return of 10.50%.
Past returns don’t necessarily predict future returns. And there have been arguments made as to whether SPY or VTI is better, but hard to argue that either are bad. If you have $500 per month to invest, you can buy roughly one share of SPY or two shares of VTI.
If you can find the discipline to do that, in 30 years (based on historical return averages), you will be sitting on a $1 million portfolio.
Thirty years is a long time to wait to become a millionaire. But getting rich slowly is better than not getting rich at all, right?
New To Investing? Where Can You Buy SPY or VTI?
Both VTI and SPY can be traded on all online trading platforms. Make sure that you pick a trading app that offers commission free trades and no hidden fees or balance minimums. We really like the mobile-first experiences with trading apps like M1 Finance or Public. But you can’t go wrong with legacy companies like Vanguard or TD Ameritrade either.