Regularly saving and investing $10 a day can ultimately lead you to build a portfolio that could exceed $1 million. Here’s how this works.

Saving $10 daily equals setting aside $3,650 annually

When you consider the need to save and invest $3,650 a year, it might appear daunting, especially with rising costs. However, if you break this down into smaller segments—aiming to save $300 monthly or $10 each day—it becomes much more manageable.

This perspective also highlights how costly daily habits can accumulate. Depending on your daily expenditures, cutting back on items like coffee or meals out could be enough to reach that savings goal.

If you can save $3,650 each year and maintain this over time, you can effectively establish a solid retirement fund. After 20 years, you will have saved $73,000 and nearly $110,000 after 30 years.

While this amount may fall short of $1 million, it illustrates the importance of investing those savings for greater growth.

A leading Vanguard fund can help you achieve higher-than-average returns

Over the last two decades, the fund has delivered total returns, including dividends, exceeding 900%, significantly outstripping the S&P 500.

Investing in the Vanguard fund over 30 years can yield a portfolio worth more than $1 million

The Vanguard ETF’s nearly 920% return over the past 20 years translates to an average compound annual growth rate (CAGR) of around 12.3%, compared to the S&P 500’s average CAGR of approximately 10.7%.

Assuming these rates continue in the long term, here’s how a daily investment of $10 or a monthly investment of $300 in the Vanguard fund would grow, alongside a comparison to merely matching the S&P 500’s performance.

While the differences in growth rates may appear minimal, over many years, they can lead to a significant divergence in totals. This demonstrates why investing in the growth-oriented Vanguard fund can be particularly advantageous. Allocating your savings there regularly can maximize your potential gains.

It’s important to keep in mind that future returns are not guaranteed, and they may differ from those projected above. However, focusing on growth stocks can significantly increase your chances of long-term success in outpacing the market.

John Mackey, the former CEO of Whole Foods Market, now a part of Amazon, serves on the board of The Motley Fool. David Jagielski does not own positions in any of the mentioned stocks. The Motley Fool is involved with, and recommends, Amazon, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool follows a disclosure policy.

The Motley Fool partners with YSL News to provide financial news, analysis, and insights aimed at helping individuals take charge of their financial futures. This content is produced independently of YSL News.

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