That means that if you invested in an index fund containing all the same stocks as the S&P 500, you could also see your savings grow by an average of about 10% per year over several decades. Your actual return will likely be a little less than that of the index itself because index funds charge annual fees to shareholders. However, these fees are usually pretty low, amounting to a few dollars per year for most people.

How to turn $10,000 into over $450,000

If you invested $10,000 into an S&P 500 index fund today and it had a 10% average annual rate of return over the next 40 years, you’d end up with nearly $452,600. And that’s without ever investing another dime after the initial $10,000.

Those who routinely invest more money could end up with a much larger sum, as could those who reinvest their dividends, excess earnings that companies split with their shareholders. Not all stocks pay them, and those that do usually only pay them quarterly. They’re often only a few dollars, but they can still add up over time, especially after being reinvested for a few decades.

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