This Simple ETF Can Turn $900 a Month into $1.2 Million

What if I told you that you could become a millionaire by saving 1.5% of your monthly salary? And depending on your age, this could happen well before your average retirement age. This is a miracle of connection.

Compound interest is the magic that provides huge investment returns over time. For example, consider an investor who deposits $10,000 and earns 10% per year. In the first year, he or she earns $1,000 in interest ($10,000 x 10%); in the second year it was $1,100 ($11,000 x 10%) and by year 10 the interest would be over $2,350 and the initial investment had grown to almost $26,000 as shown below.

The average annual salary in the US is about $60,000. Here’s how to become a millionaire by investing 1.5%, or $900, monthly in a tech ETF.

Exchange-traded funds, or ETFs, are a great option for long-term investors because they hold dozens of different stocks managed by professionals, so you don’t have to be an expert stock picker to make huge profits. We’d all like to pick consistent winners, but it’s difficult. For every successful company, there are dozens of failures. Take search engines. AlphabetGoogle Search (NASDAQ:GOOG)(NASDAQ: GOOGLE) is a big winner so we don’t think about those who failed like Infoseek, Excite, Ask Jeeves, AltaVista etc.

This is why ETF diversity is an advantage; One company’s poor performance will not sink the ship. Other advantages are that ETFs are easy to trade, just like stocks, and typically have low expense ratios compared to mutual funds.

Technology already plays a gigantic role in society, and it is constantly growing. Innovation is accelerating. I remember when answering machines and pagers were “cutting edge,” then came cell phones, home computers, the Internet, global networks, the cloud, and now artificial intelligence (AI). According to RealClear Science, your cell phone’s memory capacity is 1 million times that of the Apollo 11 spacecraft. Incredible. This is why tech stocks have been among the best performing investments and are likely to remain so in the future. iShares Global Tech ETF (NYSEMKT:IXN) offers a stunning mix of the best tech stocks.

The iShares Global Tech ETF owns 137 tech stocks but focuses on powerhouses such as Apple (NASDAQ:AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA)And Taiwan semiconductor manufacturing (New York Stock Exchange: TSM). Each of these companies is already extremely profitable and a major player in artificial intelligence, be it semiconductors, software or consumer products. Focusing on large-cap companies reduces risk; however, the fund also invests in high-growth companies such as Palantir (New York Stock Exchange: PLTR) And Crowdstrike (NASDAQ: CRWD).

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As technology stocks have risen sharply over the past two decades, iShares Global Tech has returned more than 840% since its inception in 2001, as shown below.

This amounts to 10.25% per annum. There is no guarantee that the fund will continue to perform in the same manner; however, I wouldn’t bet against tech stocks, especially amid the AI ​​boom. If the fund matches its historical returns, an investment of $900 at the beginning of each month would yield $1.16 million after 25 years—all starting from scratch.

But wealth creation doesn’t have to be limited to your own money; many employers also offer matching contributions to 401(k)s and other retirement plans, potentially reducing the individual contribution required to achieve life-changing wealth for a fairly modest investment by today’s standards.

Before you buy shares of the iShares Trust – iShares Global Tech ETF, consider the following:

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Suzanne Frey, chief executive of Alphabet, is a member of The Motley Fool’s board of directors. Bradley Guichard has positions in CrowdStrike. The Motley Fool has positions in and recommends Alphabet, Apple, CrowdStrike, Microsoft, Nvidia, Palantir Technologies and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 Microsoft calls and short January 2026 $405 Microsoft calls. The Motley Fool has a disclosure policy.

This simple ETF can turn $900 a month into $1.2 million. It was originally published by The Motley Fool.