Top ETFs For Getting RICH!! - Best Index Funds For Long Term Investing 2022 |
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In this video, we go over the best index funds for long term investing, in order to build your wealth reliably and with the maximum return on investment possible.
📹 Follow Me on Instagram: https://www.instagram.com/shervinhouse/ ✅ My Skillshare Courses: https://skl.sh/3BmoOIR Index funds or ETFs, are collections of slices of a bunch of different stocks within the market, and they provide you with a well-diversified and reliable long term investment. Since there are so many different index funds to chose from, it could be difficult for most investors to pick which ones to invest into and which ones to not. As a result, in this video we go over the top 3 index funds that everyone should invest into, and we discuss why they are the best index funds that you can get in 2022, what holdings they have, how much they return on average, as well as how you should go about investing into them. At number 3, we have VTSAX. This ETF is put together by Vanguard, one of the most reliable financial companies when it comes to index funds. VTSAX tracks the entire US market, and as a result, it holds slices of over 3,500 companies in the US market. Most index funds track the S&P 500, which is a collection of the top 500 companies in the US market, but obviously since VTSAX covers over 3,500 different stocks, it contains many more holdings than just the standard Fortune 500. When it comes to the performance of the S&P 500 vs the entire US market, it is impossible to predict which will outperform the other over what time period; as a result, it is just best to invest into an index fund of both the market as a whole, and the S&P 500 in order to cover all your bases with your portfolio and essentially average out their performance. Over the past 10 years, VTSAX has grown over 3.5x, which averages out to approximately 14% return on investment per year. Keep in mind that this does not mean that every single year this ETF went up by 14%, it just means that over the 10 year period, the gains averaged out to be about 14% a year. Also this index fund has an expense ratio of 0.04% a year, which means that for every $100 you have invested into this index fund, you will have to pay 4 cents a year as an expense fee. At number 2, we have yet another index fund that is offered by Vanguard, and this one is referred to as VOO. This ETF tracks the S&P 500, and as I mentioned before, it is a great companion investment to the VTSAX. By investing into both VTSAX and VOO, you will have invested into both an index fund of the entire market as a whole, as well as the index of the top 500 companies. Over the past 10 years, this index fund has grown about 4x, which averages out to approximately 15% return on investment per year. This means that over the past 10 years, VOO slightly outperformed VTSAX, but keep in mind that this does not necessarily mean that the same will happen in the next 10 years. There are many factors that determine whether the entire market grows more than the Fortune 500 or vice versa, and these factors can always change. This index fund also has a slightly lower expense ratio compared to VTSAX due to the fact that it has to manage far less holdings. The expense ratio of VOO is 0.03%, which means that for every $100 you have invested into this index fund, you will have to pay 3 cents year as an expense fee. At number 1, the best index fund that you can invest into is FNILX. This index fund also tracks the same holdings as the S&P 500, without officially tracking the S&P 500. The reason for this is so the index fund can cut licensing fee costs incurred by using the term "S&P 500" in its description, marketing, performance reports, etc. As a result of this, this index fund has no expense fee for the investor, and is in fact the only major index fund with a 0.00% expense ratio. FNILX started about 3 years ago, and in that time it has grown about 1.7x, which averages out to approximately 20% return on investment per year. But the question remains, how does one go about investing into these amazing index funds? The main take away should be to avoid investing into these funds in your government registered tax-sheltered accounts. The reason for this is that the contribution room available in your tax-sheltered accounts should be reserved for investments with dividends, since you are obligated to pay income taxes on your dividends whenever you receive them, whereas with these index funds, you are only taxed when you sell your holdings. |