Becoming An Index Fund Millionaire | Invest For Beginners

I learned about index funds about 7-8 years ago I think, and I started using them 3-4 years, because when you first learn about investing, you want to be like all-stars “ you want to pick stocks, like warren buffet and you want to turn $5 into 1m by 5pm “. But I learned that I can be very wealthy, without doing a lot of work, not taking that much risk and just letting my money work for me, that sounds pretty cool.

So in this video, I’m going to tell you how to be come a millionaire with index funds, but more importantly if you really need a million dollars anyways, because if you can be financially free in half the time with half the money, that’s also good.

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1. Facts you need to know

First Index funds: these are when investors like me and you pull money together, to buy a bundle of stocks to track a market index. So for example if want to track standard and poor 500, which are the 500 largest companies in the US

Second: 1M is just a Number: what you need is More than you spend

-We have 4 main expenses in life: shelter, Utilities, Groceries and Transportation

-If this is $4,000 a month, multiplied by 12, and then multiplied by 25 that tell you how much money you need to have invested

Third: Use Common Sense

-The average millionaire is 57 years old

-Less than 10% of Americans are millionaires

-88% of them graduated from college

-My point is being educated, patient and knowing that you will have to do things differently is very important

2. Basics for Actually starting to Invest

Pick a Brokerage that has your Ideal Index Fund

-My favorite brokerages are Vanguard, Fidelity and Schwab’s

-And my favorite index fund is the S&P 500

Here are the Basics you Need to Know to make this Work (just 3 )

-Pick your investments for me that’s the s&p 500 and that’s enough, because America is number one, and if you fail everyone once fails ( dark but true )

-Second: Pick a Percentage of your income your going to invest and do it every paycheck ( 10-20% is my ideal number )

-Third: Be Patient, remember the bet your making is that America will be better tomorrow than today ( and you only lose money when you take it out )

Very Important:

Invest into a Roth IRA and Max contribution at your job

3. Do as I say Don’t do as I do

My goal is Simple: I want maybe 24k a year in passive income ( I can do with 12k but life wouldn’t be as fun )

-First multiply by 25 and I know I need 600k

Second: How long will it take me to make it

-Well on average this investing style makes about 11%

-And if invest $500 bucks a month for 25 years I can have about 686k

-If you start at 30, you’ll be 55, paid of home, no debt, no car loans ( its awesome )

Third Progress so Far

-I’ve managed to buy 709 shares of VOO ( taxable ACcount

-401k I have 47 shares

-Roth 401k 76 shares

-All together that’s about 832 shares

Dividend this makes me: $4833.92

Gain: if I gain 11% a year: $33,711.26

Total of: $38,845

But here the Truth: if I spent that money, I would be in trouble because, I wouldn’t be allowing my money to grow, so the only amount I can spend is about 4% of my total balance:

-So its more like I can spend $12k plus if I want to spend the dividend 16k or so

-But I don’t spend any of the money, because I just want it to grow

Tools:

Savings goal: https://www.investor.gov/financial-tools-calculators/calculators/savings-goal-calculator

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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