The Long Game: How a Steady $500 Monthly Investment in This ETF Could Build a Million-Dollar Portfolio

For most investors, the dream of accumulating a million dollars can seem distant. Yet, the path to reaching that milestone may not require speculative bets or market-timing genius. Instead, it often boils down to a simple, time-tested formula: consistent investment in a diversified, growth-oriented fund and the relentless power of compounding.

Take the Vanguard Growth ETF (VUG) (NYSEMKT: VUG), for instance. Since its inception in 2004, this exchange-traded fund has delivered robust average annual returns by tracking large-cap U.S. growth stocks—companies like Apple, Microsoft, and Amazon that are expanding revenues and profits faster than the market average.

Historical data provides a compelling blueprint. Over the past decade, VUG has posted an average annual return of approximately 17%. Taking a more conservative, long-term view and averaging its lifetime performance, a hypothetical 14% annual return illustrates the potential. By investing $500 each month and reinvesting all dividends, an investor could cross the $1 million threshold in roughly 25 years. This strategy leverages the dual advantage of VUG's focus: the upside potential of growth equities paired with the relative stability of established, large-cap companies.

Of course, past performance is no guarantee. Market cycles, economic downturns, and shifting sector leadership mean future returns will vary. However, VUG's track record of outperforming the S&P 500 in 15 of its 22 full years of existence offers a degree of confidence in its methodology. The underlying principle remains: time in the market, coupled with regular contributions, can mitigate volatility and build substantial wealth.

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It's worth noting that while broad-market ETFs like VUG form a solid core portfolio, other strategies exist. The Stock Advisor service, for example, focuses on individual stock selection, boasting a significant average return since 2002. Their recommendations, such as Netflix and Nvidia in the mid-2000s, generated life-changing returns for early subscribers.

Investor Perspectives:

• Michael R., Financial Planner (Seattle, WA): "VUG is a quintessential 'set-it-and-forget-it' component for a growth portfolio. The math on systematic investing is irrefutable. The real challenge for clients isn't picking the fund—it's maintaining the discipline for 25 years through every market headline."
• David Chen, Tech Entrepreneur (Austin, TX): "It's a safe, slow path. I respect it, but my portfolio leans into disruptive innovation. ETFs like this won't capture the next NVIDIA. They're for preserving wealth, not aggressively creating it from scratch."
• Linda Garcia, Retired Teacher (Tampa, FL): "This is the advice I wish I'd gotten at 30! Everyone chases hot tips. This article cuts through the noise. It's not sexy, but $500 a month? That was doable. Now I'm playing catch-up."
• Marcus Johnson, Freelance Writer (Portland, OR): "Oh, fantastic. Another article preaching 'just give your money to Vanguard and wait 30 years.' Meanwhile, wages are stagnant and inflation eats everything. This 'advice' feels increasingly disconnected from economic reality for anyone not already comfortable."

Disclosure: The author has no position in VUG. The Motley Fool holds positions in and recommends Vanguard Growth ETF. Past performance does not guarantee future results. Investing involves risk, including potential loss of principal.