Young Investor's $450 Monthly Plan Could Yield $976,700 in 30 Years
A 25-year-old saving $450 monthly in the Vanguard S&P 500 ETF (VOO) could accumulate a substantial nest egg. Over three decades, this investment could grow to $976,700, generating $17,500 in annual dividend income. This strategy aligns with financial advisors' recommendation of saving 20% of after-tax income for retirement.
The Vanguard S&P 500 ETF is an attractive option due to its low expense ratio of 0.03%, well below the average for U.S. index funds and mutual funds. It tracks the S&P 500 index, which covers about 80% of domestic equities and 40% of global equities by market capitalization. The top five holdings typically include tech giants like Apple, Microsoft, Amazon, Alphabet, and Tesla, providing broad exposure to the market.
Investing consistently over time can lead to significant growth. In another five years, the portfolio could reach $1.4 million, paying $26,300 in annual dividend income. This is particularly notable given that the median annual income for full-time workers aged 25 to 34 was about $59,200 as of June 2025. Historically, the S&P 500 has never generated a negative return over any 15-year period since 1950, further bolstering the case for long-term investing.
Investing $450 monthly in the Vanguard S&P 500 ETF for three decades could yield a substantial retirement fund. With a low expense ratio and broad market exposure, this strategy offers a simple and effective way to grow wealth over time. Despite the median income for this age group being about $45,000 after taxes, consistent saving and investing can lead to significant financial growth.
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