By the time I reach retirement age, I expect to be a millionaire. My investment portfolio will be a big part of the reason that happens, as I’ve earned a generous return on my investments over time and expect that to continue.
My portfolio has performed well for me, and I’m confident it will keep doing so — even though I’m not very interested in picking stocks, and I’m unwilling to spend a lot of time doing it. Instead, the vast majority of my money is in a few simple investments that I’m almost 100% certain will produce the returns I need to end up with a seven-figure nest egg. Here’s what those investments are.
These investments will help me build a big retirement nest egg
The investments I’m counting on to make me a millionaire retiree are exchange-traded funds (ETFs). Specifically, I’ve invested the bulk of my retirement portfolio in ETFs that track financial indexes.
I’ve done this for a few simple reasons.
ETFs tracking financial indexes are a low-fee, low-risk investment
The ETFs I’ve invested in track the S&P 500 and other financial indexes focused on midsized companies, small companies, emerging markets, bonds, and real estate.
The funds I’ve chosen are very low risk because:
- They have solid performance records.
- They give me a very small ownership stake in hundreds of different companies, real estate investment trusts (REITs), or other assets.
And because they simply track financial indexes, they charge very low fees because they don’t require an investment professional to individually pick which assets the funds own.
For example, I have a lot of money in an ETF that tracks the S&P 500, a stock index consisting of 500 large U.S. companies. Because I bought this ETF, I essentially made a bet that the largest companies in the U.S. would continue to grow and thrive. These companies are well-established household names, and the S&P 500 has a decades-long track record of producing average annual returns of around 10%.
By investing in ETFs tracking financial indexes with a proven performance history, the chances I’ll end up losing a lot of money are close to nothing. The bulk of the assets would need to lose value for that to happen. And the chances that I’ll earn the returns I’m expecting are very high.
I don’t want to risk my retirement on speculative investments, so this approach was a no-brainer for me.
Picking ETFs is really easy
I’m not a person who enjoys spending time pouring over earning statements or reading in-depth …….