September 27, 2023

S&P 500: If You Have $1 Stocks Can Make You A Millionaire – Here’s How

It doesn’t matter how much money you have now – you can become a millionaire. All that matters is how patient you are and which S&P 500 stocks you buy.


Even if you only have $1 and never invest another cent, you can be a millionaire in 30 years. It’s just that you have to hit a home run S&P 500 stock every year – yielding at least 58.5%.

That’s a tall order, yes. But this year it really is possible. Six stocks in the S&P 500, inclusive Nvidia (NVDA), Meta platforms (META), Royal Caribbean (RCL), Advanced micro devices (AMD), Tesla (TSLA) and Carnival (CCL), have all won more than enough this year to meet that threshold.

It is clear that it is not easy to do this every year. The S&P 500 only returns about 10% per year on average over time. But there are other levers you can use to reach a million in just three decades.

Making Of S&P 500 Millionaires

If it’s possible to turn a small amount into a million dollars, it’s not hard to imagine how much easier it could be if you got a little more aggressive.

Starting with more money or investing more money each year reduces the pressure on the number of home run stocks you need to buy to hit a million.

Let’s say you start with $1, but only contribute $1,000 per year. In that case, you just need to find stocks that yield 19.2% annually to be a millionaire in 30 years. That’s still double the typical return of the S&P 500. But much more achievable than a 58.5% annual return if you don’t keep investing. This year, 72 stocks in the S&P 500 are up that much or more.

But this is where the magic happens. Increase that annual investment to $10,000 and you’ll only need a 7.3% annual return to be a millionaire in 30 years – even if you started with just $1. That’s actually more than possible and could be achieved with a moderately aggressive portfolio.

How the rich get richer

When you consider how to turn a dollar into a million, you can only imagine what is possible when you start with a larger amount.

Just set aside $10,000 and never save another dime and you’ll be in a million dollars in 30 years if you can pick a stock that yields 16.6% annually. If that’s too hard, just add $10,000 a year to your investments and you’ll be a millionaire in 30 years if you make just a historically easy-to-achieve annual return on your money of 6.9%.

Likewise, the hurdles to a million drop quickly if you start with larger amounts. Start with $500,000 or $750,000 and you only need an annual return of 2.3% or 1.0%, respectively, to end up with a million.

Start with $750,000 and add another $10,000 a year? You can even lose money on your wallet and still have a million in 30 years.

Given that interest rates on savings accounts now hover around 4%, you can understand why so many wealthy people like to sit on cash.

Is a million dollars enough?

However, there is another important caveat. Having a million dollars in 30 years is not the same as having it now. Inflation, which has been running high for months, is eating away at the value of money.

In fact, having a million dollars in 30 years ago is the same as having $2.1 million today, thanks to the cumulative inflation rate of nearly 110% during that time. That means if you want to feel as posh in 30 years as you are a millionaire today, you should actually aim for more than $2 million.

What kind of stock would turn $1 into that in 30 years with no annual contribution? One that generates a 62% annual return. For investors who own Nvidia, up nearly 160% this year, that seems more than achievable. But can Nvidia keep that up for 30 years? And if not, can investors find the S&P 500 stocks that do every year?

Now, that’s a bit more difficult.

How to be a millionaire

It’s easier than it sounds

To start with Annual contribution Annual Returns Needed to Hit a Million*
$1 $0 58.5%
$1 $10,000 7.3%
$10,000 $0 16.6%
$10,000 $10,000 6.9%
$100,000 $0 8.0%
$100,000 $10,000 4.6%
$250,000 $0 4.7%
$250,000 $10,000 2.7%
$500,000 $0 2.3%
$500,000 $10,000 0.9%
$750,000 $0 1.0%
$750,000 $10,000 -0.2%
Sources: IBD, S&P Global Market Intelligence, *- Compiled annually for over 30 years

Follow Matt Krantz on Twitter @mattkrantz


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