THE POWER OF INDEX INVESTING

Warren Buffet recommends new investors put their first $10k in an S&P 500 index fund.

Why?

You're killing yourself when you don't need to.

This strategy is enough to make you a millionaire, let me show you how!

- THREAD -

Index investing is based on the concept that most investors aren't good enough to successfully pick individual companies.

Instead of trying to stock pick, you simply buy an index that represents a large basket of stocks.

This makes sure your investments are diversified.

Buffett's suggestion is to invest in the S&P 500 and let it sit there.

Pretty simple.

But this strategy has returned an amazing 9.8% annualized over the past 90 years.

But what does that really mean?

Le'ts break it down.

(trust me, you want to keep reading)

Let's say you're 25 and make $55,000 a year.

You invest 20% of your salary into an S&P 500 etf.

After 30 years, you'll be a millionaire.

Yup, over $1,000,000.

Not too bad since we aren't factoring in any raises over this 30 year span.

(assuming 7% annualized returns)

But what if you try to pick and choose stocks though, instead of putting that money into the ETF?

Well, the average investor only achieves about 2% annualized returns.

So after 30 years, the average investor would only have $450,000 instead of over $1 million.

This simple strategy could be the difference between becoming a millionaire, or "only" having $450,000 invested.

That...is the power of index investing.

#Stocks #Investing #StockMarket