1 Vanguard Index Fund Could Turn $375 per Month Into a $798,600 Portfolio That Pays $13,500 in Annual Dividend Income

2 days ago 2

Trevor Jennewine, The Motley Fool

Mon, December 29, 2025 astatine 3:32 AM CST 5 min read

History says investing $375 per period successful the Vanguard S&P 500 ETF tin physique a $798,600 portfolio that pays $13,500 successful yearly dividend income successful 3 decades.
The S&P 500 bushed benchmarks for astir different plus classes during the past 2 decades and has ne'er generated a antagonistic instrumentality implicit immoderate 15-year period.
The S&P 500 achieved a full instrumentality of 1,860% implicit the past 3 decades, and it paid an mean dividend output of 1.7% during that past 10 years.
10 stocks we similar amended than Vanguard S&P 500 ETF ›

The median yearly income for full-time workers ages 25 to 34 was astir $60,000 arsenic of September 2025. That would beryllium astir $45,500 aft national and authorities income taxes adjacent successful the worst scenario. Financial advisors urge redeeming 20% of after-tax income for retirement, which means $9,100 per twelvemonth ($758 per month) for the median idiosyncratic successful that property group.

However, adjacent fractional that sum could turn into a sizable portfolio fixed capable time. History says $375 invested monthly successful the Vanguard S&P 500 ETF (NYSEMKT: VOO) could turn into $798,600 implicit 3 decades, and that sum would past make $13,500 successful yearly dividend income. Read connected to larn more.

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The Vanguard S&P 500 ETF tracks the S&P 500 (SNPINDEX: ^GSPC), an scale comprising 500 ample U.S. stocks that screen astir 80% of home equities and 40% of planetary equities by marketplace capitalization.

In that sense, the Vanguard S&P 500 ETF is simply a ready-made portfolio that provides diversified vulnerability to galore of the astir influential companies successful the world. The 5 largest holdings are listed by value below:

Nvidia: 7.3%
Apple: 7%
Microsoft: 6.2%
Alphabet: 5.7%
Amazon: 3.8%

The Vanguard S&P 500 ETF has an disbursal ratio of 0.03%, meaning shareholders volition wage conscionable $3 annually connected each $10,000 invested successful the fund. That is good beneath the mean disbursal ratio of 0.34% connected U.S. scale funds and communal funds. Beyond that, the concern thesis for the Vanguard S&P 500 ETF whitethorn beryllium summarized successful 3 points:

The S&P 500 outperformed benchmarks for astir different plus classes successful the past 20 years, including planetary stocks, fixed income, existent estate, and precious metals.
Less than 12% of large-cap funds bushed the S&P 500 implicit the past 15 years, meaning adjacent nonrecreational wealth managers conflict to outperform the scale implicit agelong periods.
The S&P 500 has ne'er yielded a antagonistic instrumentality implicit immoderate 15-year play since 1950, which means gains are virtually guaranteed for diligent investors.