Investing $50,000 in the Vanguard S&P 500 ETF: A Path to a Million-Dollar Portfolio

If you're an investor seeking a reliable way to track the performance of the U.S. stock market, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a popular choice. By investing in this exchange-traded fund (ETF), you can earn a solid return over the long run without taking on unnecessary risk. In this article, we'll explore why investing in the Vanguard S&P 500 ETF can be a great move and what the potential returns could be if you invest $50,000 today.

The S&P 500 Index: A Broad Market Exposure The S&P 500 index tracks the performance of the leading stocks on U.S. exchanges, giving you broad, comprehensive exposure to the overall market without investing in small or risky companies. Historically, the S&P 500 has generated annual returns of around 10%, which can add up significantly over time.

Compounded Returns Over Time Let's assume you invest $50,000 in the Vanguard S&P 500 ETF and your average annual return is 10% over 10 years. By then, your investment will have more than doubled and be worth around 2.6 times its original value. And if you hold on for even longer—25 years—your portfolio will have grown to 10.8 times its original value. This is why over the long term, anyone can conceivably amass significant returns, regardless of their investing abilities.

Projecting Returns Over the Long Run To give you an idea of what your potential returns could be, we've created a table showing a range of possibilities with annual returns between 8% and 12% using a $50,000 investment in the Vanguard S&P 500 ETF over at least 25 years. This can allow you to see both a worst-case scenario (the investment underperforms the S&P's historical average) and a best-case scenario (it does far better than usual).