People say that I’m a millionaire, but that’s not true – I only spend millions :Robert Plant
The goal of this strategy is to use the power of compounding
The snowball effect that happens when your dividends even more earnings. You receive dividends not only on your original investments, but also on any interest, dividends, and capital gains that accumulate—so your money can grow faster and faster as the years roll on.
Target investment is : $5000 per year
Translate into weekly investment of : $96
Starting investing every week into just one single commision free ETF in Fidelity –
IShares Expanded Tech Software Sector ETF ( IGV )
Which invests in software industry ,interactive home entertainment and media service industries. The top holdings are Microsoft , Adobe , Oracle , Sales force, Service Now, Red Hat, Electronic Arts etc.( with 91 different stocks ) .
Last 10 years Annualized returns on this 22% per year.
If keep investing $96 for 20% returns compounding takes 1 Million in 20 years.
In this total invested capital is $99.840 in 20 years, all the remaining comes from compounding returns. Say you are age 40 now , at age 60 welcome to the Millionaire club.
Hold on , at age 60 – you can take this money out without tax – by investing this in ROTH IRA.
There are many ETF which can fetch similar returns.
Another, commision free ETF is IShares US medical Devices – IHI . Which has returns of 21% in last 10 years.
The major holding
What is your strategy ? , Share your thoughts !!!!!