I’ve had this idea for a while, but haven’t gotten around to actually doing it – to invest $1,000 while I’m young and track its ups and downs for the rest of my life.
Then the government (read: you and I as U.S. taxpayers) decided to send me some money to inject into the economy and help us all get back to somewhat normal during a global pandemic. What better way to put that money to work than to invest in American businesses?
Into the brokerage account it went. If I weren’t tracking this investment, I would have bought a few shares of my go-to index fund, in which the vast majority of my net worth is invested, the Vanguard Total Stock Market ETF (Ticker symbol: VTI). But then the dividends would get mixed in with the dividends of my previously purchased shares and would be difficult to calculate the exact return.
So I decided to invest in a very similar index fund, the S&P 500, which is a collection of the 500 of the biggest companies in the United States (you can see the entire list here). Vanguard’s S&P 500 fund has the ticker symbol VOO, and was trading at ~$250 per share earlier this week. I was able to buy 4 shares at $250.00 apiece, so invested exactly $1,000.00 as pictured above on April 21, 2020.
I will keep you updated on my $1,000 investment over time, checking in every now and then to see how much money I’m making or losing at any given time. If you would like to follow along on your own, you can just type “VOO” into Google (or click this link) and see how much one share is worth at that exact moment. As of the market close Friday, one share was worth $260.14, meaning my investment has increased by $40 already ($260.14 x 4 shares = $1,040.56).
Better yet, feel free to follow along by investing yourself and watching your money grow in the coming years! Now is a great time to do it, and if you need any assistance getting started I’m happy to help. Feel free to send me an email at hashtagmoneygoals@gmail.com.
Stay tuned.
#MoneyGoals
Pictured: The actual purchase of my 4 shares of VOO on April 21, 2020.
Some additional thoughts if you are starving for more content while in quarantine:
I’m planning on holding on to these 4 shares of VOO for the rest of my life. Assuming my $1,000 grows 7% each year (which is about the stock market’s average), it should be worth the below amounts each decade. I’ll check in many times before then, but we’ll see if I double my money in the next 10 years. I will bet anybody a Chipotle burrito that it will be worth more than $2,000 by April 21, 2030 😉
- 2020: $1,000
- 2030: $1,967
- 2040: $3,869
- 2050: $7,612
- 2060: $14,974
- 2070: $29,457
- 2080: $57,946
- 2090: $113,989
- 2100: $224,234
The reason why I would take that bet, and the reason why I say it’s a great time to start/continue investing is that 1) the stock market is down and we are either in, or on the brink of, a recession. This is the best time to buy stocks and make investments because prices are low (think of buying an apple tree that typically costs $100 and produces $7 each year in apples for 30% off) and 2) because recessions are typically followed by periods of strong economic growth.
For example, if you would have purchased $1,000 of VOO 10 years ago on April 21, 2010 as we were coming out of the housing market crash and Great Recession, it would be worth ~$2,900 today. Almost tripling your hypothetical investment in 10 years, and easily surpassing the estimated returns for the coming decades I have above. Get out there and invest y’all!
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