Becoming a Millionaire can seem like a daunting task to most people however its achievable for the vast majority of people.
I believe the easiest way to become a millionaire is by investing in Index funds, it certainly not the fastest way to become a millionaire, the s&p 500 one of the most commonly used indexes has averaged about 10% since its inception where as with other forms of investing such as real estate you could be looking at 20% + returns per year if done correctly.
investing in index funds is good for a number of reasons:
you can invest in index funds through tax efficient accounts such as ISAs or SIPP both of these accounts have benefits for different people however I won’t go into detail in the post as this very much depends on you personal goals and circumstances.
They’re low maintenance you can often buy these through one of the main index fund providers by setting up a direct debit so every time you get paid a certain proportion of the money is automatically invested you may every so often need to rebalance the portfolio and reinvest any dividends however this is about the extent of the work needed for this it can be done in minutes.
They’re well diversified some index funds can contain thousands of stocks which means the risk of you loosing your money in minimised, I know loosing money is a big concern for anyone looking to invest, so index funds can be great for anyone looking to have a safer investment strategy.
Most index fund providers have low fees, fees can quickly eat into the profit you make on your investments so minimising the fees you pay should be a big concern for any investor luckily most providers keep these to a minimum.
How Much Do You Need To Invest To Become An Index Fund Millionaire
using a slightly more conservative rate of return than the one previously mentioned we will use 7% ROI per year and break down how much you would need to invest per year to become a millionaire.
10 years-£70000 per year approx.
15 years-£37500 per year approx.
20 years-£23000 per year approx.
25 years-£15000 per year approx.
30 years-£10000 per year approx.
35 years-£7000 per year approx.
40 years-£4750 per year approx.
As you can see its achievable for most people to retire a millionaire with index funds its not a get rich quick method but its achievable also remember I’ve used conservative estimates with my calculations so you could also expect to have more than a million if you invested the stated amounts for the time. It’s important you do your own research when investing however the advice i’ve mentioned through is just my opinion please do your own research before investing into index funds.