For many people, including myself, the $1 million mark has long been a symbolic financial milestone. Unfortunately, reaching $1 million by strictly saving is all but impossible for the vast majority of people. Even with 40 years to do it, it would require saving $25,000 after tax annually. Considering the median annual U.S. household income is just under $75,000, it’s not feasible for most people.
Luckily, there’s this thing called investing that can help make hitting $1 million possible. And to make it even better, it can likely be achieved by investing $500 monthly into an S&P 500 ETF.
Compounding
Compounding is one of the most powerful forces in investing and arguably the biggest wealth-generating phenomenon. It happens when the returns you earn on investments begins to earn returns on itself.
Suppose you invest $1,000 and get an annual return of 10%. After year one, you would’ve…
