Here's How Much a $500-per-Month Investment in the S&P 500 Could Grow Over the Long Term
The S&P 500 index contains the best stocks in the world.
Investing in exchange-traded funds that track the S&P 500 can be an great way for investors to grow their wealth over the long haul.
10 stocks we like better than SPDR S&P 500 ETF Trust ›
Investing in the S&P 500 index has been a great way for investors to grow their wealth for not just years but decades. Having a position in the top 500 stocks in the world is an easy way for anyone to invest in the stock market. There's no need to pick individual stocks, track the latest stock news and analyze it, or do anything else besides put money into an exchange-traded fund (ETF) that tracks the index.
Whether you're a long-term investor who wants a simple strategy or if you just don't want to have to worry about tracking individual companies, having a position in the broad index can make a lot of sense. And even if you don't have thousands of dollars to invest today, investing money every month can still help you build up a massive portfolio in the long run.
Below, I'll show you how a $500-per-month investment into an S&P 500 ETF can grow over a period of 25-plus years.
Historically, the S&P 500 has averaged annual returns of around 10%. At that rate, it would take a little over seven years for an investment to double in value. And if that average holds up over 25 years, then your investment would grow to close to 11 times its original value.
There's a huge incentive in tracking the S&P 500 simply because it'll always contain the best growth stocks on the market and rebalance on its own. You don't have to worry about making any decisions about which stocks to buy or sell.
An ETF that does an excellent job of tracking the index is the SPDR S&P 500 ETF (NYSEMKT: SPY). It has a low expense ratio of 0.09%, and in return it gives you an easy way to invest in the top stocks on the market. As you can see from the chart below, the difference between the ETF's returns and the S&P 500's returns over the past decade has been negligible.
Investing in an S&P 500 fund can be a no-brainer decision for long-term investors. And in the table below, you'll see how much your portfolio might be worth if you invest $500 each month into the SPY ETF. I've included multiple columns for potential returns to account for multiple scenarios, including a possible slowdown in the future. The biggest unknown when it comes to investing is always what that average annual return will be, and unfortunately, that will also have the most significant impact on any projections that you make.
Year
9% Growth
10% Growth
11% Growth
25
$564,765
$668,945
$795,291
30
$922,237
$1,139,663
$1,415,114
35
$1,481,924
$1,914,138
$2,486,736
40
$2,358,215
$3,188,390
$4,339,481
Calculations and table by author.
The table helps to illustrate just how significant even a 1% change in your annual return can impact your portfolio balance, especially in later years. But by investing $500 each month into the SPY ETF, you could be on track to grow your portfolio to $1 million one day.
Through the power of compounding the longer you stay invested, the higher your portfolio is likely to grow. While there will be bad years along the way, staying the course, trusting the process, and remaining invested is the key to ensuring you reach your goals.
Before you buy stock in SPDR S&P 500 ETF Trust, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and SPDR S&P 500 ETF Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!*
Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of May 19, 2025
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Here's How Much a $500-per-Month Investment in the S&P 500 Could Grow Over the Long Term was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
14 minutes ago
- Yahoo
1 Ultra-Safe Dividend King Stock to Double Up On in June
Illinois Tool Works benefits from diversification and pricing power. The company is effectively managing tariffs and macro challenges. Illinois Tool Works has an impeccable track record of supporting dividend growth. 10 stocks we like better than Illinois Tool Works › Illinois Tool Works (NYSE: ITW) -- often referred to simply as ITW -- is an industrial conglomerate and Dividend King that has boosted its payout for 61 consecutive years. However, ITW's stock price and earnings have stagnated as the company faces a challenging operating environment. Despite these conditions, ITW continues to chart a path toward long-term growth and set clear shareholder expectations. Here's why ITW stands out as a top Dividend King to buy in June. A good management team will set clear standards that investors can use to determine if the company is executing on its goals. A blend of short-term, medium-term, and long-term targets can help build an investment thesis and determine if those targets are good enough to buy and hold a stock. ITW is an excellent example of a company that set ambitious goals, achieved them, and rewarded its shareholders over an extended time period. From 2012 to 2023, ITW deployed its Enterprise Strategy, which boosted its operating margin by over 9 percentage points, more than tripled its earnings per share (EPS) and market cap, and increased its dividend by 3.7 times. From 2024 to 2030, ITW is focusing on organic growth, led by its Customer-Back Innovation process. The process involves acting on customer ideas and responding to customer needs rather than coming up with ideas and hoping they stick. The idea is to leverage ITW's existing brands and take those brands to the next level through product development and global sales rather than overly relying on mergers and acquisitions. The strategy aligns with ITW's structure. Although ITW is a conglomerate with dozens of brands and seven key segments -- automotive original equipment manufacturing, construction products, food equipment, polymers and fluids, specialty products, test and measurement and electronics, and welding -- it gives a lot of flexibility to each segment. This autonomy allows each segment to adapt to changing demand trends, pricing, and economic conditions. By 2030, ITW expects its operating margin to reach 30% and achieve average annual EPS growth of 9% to 10%, which will support a 7% annual increase in its dividend. It also plans to convert 100% of net income into free cash flow, which will support a growing dividend, buybacks, and organic investments. It's a bold strategy, but ITW's results showed that it was possible as the company steadily grew its operating margin. But the recent quarter saw a decline in operating margins and sales. In the first quarter of 2025, revenue fell 3.4%, organic growth was down 1.6%, and operating margin was just 24.8% compared to 25.4% in the first quarter of 2024 (after accounting for a one-time inventory accounting change). Generally accepted accounting principles (GAAP) EPS in the quarter was down a mere 2.5% after factoring in the accounting change. Overall, the quarter wasn't bad given customer uncertainty amid tariff pressures. And better yet, ITW maintained its full-year 2025 guidance for $10.15 to $10.55 in GAAP EPS and organic growth of 1% to 3%. ITW has hit a speed bump on the road toward its 2030 goals, but that doesn't mean the stock isn't a good buy now. One of the most compelling reasons to own ITW is the company's steady dividend growth and dividend affordability. As you can see in the chart, ITW has steadily grown its EPS and FCF per share -- which has supported a growing dividend and considerable buybacks that have drastically reduced ITW's share count -- thereby accelerating EPS growth. In addition to being a reliable dividend stock, ITW is also a good value. Based on the midpoint of ITW's 2025 guidance -- $10.35 in EPS -- and the stock price at the time of this writing of around $245 per share, the company would have a price-to-earnings ratio of 23.7, which isn't dirt cheap, but it is reasonable for a high-quality business that is extremely well run. ITW checks all the boxes of a safe stock to double up on in June. There was more tariff uncertainty when ITW reported its first-quarter earnings in late April. And yet, the company's earnings didn't take too much of a hit, and it reaffirmed full-year guidance -- showcasing ITW's confidence in its ability to navigate tariffs. ITW generates plenty of earnings and cash flow to cover its dividend payment and still has plenty of dry powder left over to buy back stock. ITW's valuation is reasonable, and its 2.5% yield is solid. ITW is the kind of business investors can build a passive income portfolio around, making it a good buy now. Before you buy stock in Illinois Tool Works, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Illinois Tool Works wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool recommends Illinois Tool Works. The Motley Fool has a disclosure policy. 1 Ultra-Safe Dividend King Stock to Double Up On in June was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14 minutes ago
- Yahoo
Analysts Look to Tesla's Robotaxi Launch After Stock Hit From Musk-Trump Spat
Tesla is expected to launch its autonomous ride hailing service later this month, perhaps as soon as this week. The company has yet to confirm or deny a report from Bloomberg that it is targeting a June 12 launch for the robotaxi. The EV maker's stock could use a lift after a week marked by a spat between CEO Elon Musk and President (TSLA) is expected to launch its robotaxi service in Austin, Texas, as soon as this week, with the electric vehicle maker's stock in need of a lift after a week marked by political strife between CEO Elon Musk and President Trump. The stock rebounded nearly 4% to close just above $295 Friday, after tumbling 14% on Thursday. They've lost roughly one-quarter of their value since the start of the year. Tesla bulls believe a robotaxi program could drive substantial upside in the company's stock. Bloomberg last month reported that Tesla was targeting a June 12 launch, citing a person familiar with the matter, adding that the date could change. The company has not confirmed that date, and Tesla did not respond to Investopedia's request for comment in time for publication. Musk said in last month's earnings call and a May 20 interview with CNBC that the company was still on track to launch the program by the end of the month. The start of the program, Musk told CNBC, will likely be about 10 Model Y vehicles operating autonomously, with the company later expanding to more vehicles and cities. Tesla owners will eventually be able to add their vehicle to the available fleet of Teslas to rent for a ride, Musk has said, which could help Tesla scale the project before the Cybercab goes into production next year. Oppenheimer analysts recently wrote that the company's ability to get its software to drive fully autonomously with its current suite of cameras could be "key to its technology leadership and stock performance," but added they believe it might take at least one or two more hardware and software updates before Tesla can deliver reliable autonomous performance. More bullish analysts, like Wedbush's Dan Ives, have said they think successful autonomous driving software will be the start of technology that will eventually add $1 trillion in value to the company. Overall, analysts are somewhat divided on Tesla's stock, with 10 of the brokers tracked by Visible Alpha giving the stock a "buy" rating, with four "hold" and four "sell" ratings. Their average price target is about $304, slightly above Friday's closing level, but their price targets range from as low as $120 to as high as $500. Read the original article on Investopedia
Yahoo
14 minutes ago
- Yahoo
Why One Analyst Thinks Tesla Could Dominate the 'Low-Altitude Economy'
"Look up, your ride has arrived," is a message some see as eventually landing in your inbox. 'In our view, the low altitude economy (LAE) may eventually vastly exceed the size of today's automotive market,' wrote Morgan Stanley analyst Adam Jonas in a research note earlier this week. That term refers to aerial commercial activities conducted within one mile of the earth's surface, airspace now sparsely occupied by helicopters and small drones. Analysts expect advancements in artificial intelligence and robotics to support the launch of new aircraft—notably, electric vertical take-off and landing (eVTOL) vehicles—with applications in areas like logistics/distribution, public security and emergency services, tourism, urban commuting, and intercity transportation. Morgan Stanley forecasts the total addressable 'Urban Air Mobility' (UAM) market will be valued at $1 trillion by 2040 and $9 trillion by 2050. Not everybody's expectations are quite that high: Bank of America recently estimated a market worth $23 billion by 2035. BofA expects adoption to remain relatively slow until at least that year, when it anticipates economies of scale and battery technologies to improve eVTOL cost and accessibility. Whatever the size of the pie, the companies vying for a slice of it include upstarts like Archer Aviation (ACHR), which is currently testing an eVTOL model and partnering with defense contractor Anduril to develop military applications, and Joby Aviation (JOBY), which is in the process of getting its air taxi certified for passenger rides. Morgan Stanley's Jonas thinks those companies could face formidable competition from Tesla (TSLA). The EV maker hasn't announced any intention to develop eVTOLs, but CEO Elon Musk has discussed the need for a homegrown low-altitude economy in the U.S. When Jonas, on Tesla's most recent earnings call, asked Musk for his thoughts on the U.S. and China's AI and robotics rivalry, Musk expressed concern about America's limited drone manufacturing capabilities. 'Any country that cannot manufacture its own drones is doomed to be the vassal state of any country that can,' he said, quoting X user "@naval." 'And we can't. America cannot currently manufacture its own drones.' Tesla, Jonas says, 'has a host of relevant skills to be a factor' in the commercial and military LAE, including its work in manufacturing, autonomy, electric motors and batteries, and robotics. Jonas estimates Tesla's share of a future $9 trillion UAM market could add between $100 and $1,000 to its share price. Tesla's work on autonomous vehicles could give it a leg up on LAE competitors. "Any advancement in the science of autonomous cars accelerates the advancement of autonomous aerial drones," Jonas wrote. Tesla is expected to launch its first robotaxi operation in Austin, Texas, later this month. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
