A $300 Monthly Investment in the S&P 500 Can Reach $1.08 Million Over 35 Years

An investor who consistently contributes $300 every month to a low-cost S&P 500 index fund for 35 years accumulates approximately $1.08 million. This outcome is based on the index's annualized average return of 10.5% over the past 50 years, including reinvested dividends. The strategy is advocated by Warren Buffett, who suggests that low-cost index funds beat the majority of professional money managers over long horizons. Buffett highlights the importance of minimizing fees, noting that a 1% annual management fee can consume more than $200,000 in compounding gains on a path to a $1 million portfolio. He recommends index funds with expense ratios as low as 0.03%.