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 a dollar and never invest a penny again, you can be a millionaire in 30 years. It's just that every year you have to hit a home run stock in the S&P 500 that has a yield of at least 58.5%.

It's a big job, yes. But this year it was actually possible. Six stocks in the S&P 500, including Nvidia (NVDA), metaplatforms (META), royal caribbean (RCL), modern micro devices (AMD), Tesla (TSLA) and carnival (CCL) have all gained more than enough this year to reach that threshold.

Of course, it's 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 pull to reach a million in just three decades.

Making Of S&P 500 Millionaires

If it's possible to turn a simple dollar into a million dollars, it's not hard to imagine how much easier it could be by being a little more aggressive.

Starting with more money or investing more money annually takes away the pressure of how many home run stocks to buy to hit a million.

Let's say you start with $1 but only donate $1,000 per year. In this case, all you would have to do is find stocks that produce a 19.2% annualized return to be a millionaire in 30 years. That's still double the typical return of the S&P 500. But a lot more doable than a 58.5% annual return if you're not investing further. This year, 72 stocks in the S&P 500 have risen as much or more.

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

How the rich get richer

When you think about turning a dollar into a million, you can only imagine what is possible when you start with a bigger sum.

Just put $10,000 aside and never save another penny, and you'll be sitting on $1 million 30 years from now if you can pick a stock that produces a 16.6% annualized return. If that's too difficult, just increase your investments by $10,000 annually and you'll be a millionaire in 30 years for a historically easy 6.9% annual return on your money.

Likewise, the hurdles for a million drop quickly when you start with larger amounts. Start with $500,000 or $750,000 and you only need a 2.3% or 1.0% annualized return to end up with a million.

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

With interest rates on savings accounts currently hovering around 4%, it's understandable why so many rich people are happy to be left with cash.

Is a million dollars enough?

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

In fact, having a million dollars 30 years ago is like having $2.1 million today, thanks to cumulative inflation of nearly 110% over that time. That means if you want to feel as distinguished in 30 years as a millionaire does today, you would actually have to aim for more than $2 million.

What kind of stock would make that much out of $1 in 30 years without requiring an annual contribution? One that brings 62% annual returns. For investors who own Nvidia, which is up nearly 160% this year, that seems more than doable. But can Nvidia hold out for 30 years? And if not, can investors find the S&P 500 stock that turns positive every year?

Well, that's a little harder.

How to become a millionaire

It's easier than it sounds

Start with Annual contribution Annual return required to reach one 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, * – over 30 years compounded annually

Follow Matt Krantz on Twitter @dull wreath


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