How $400 Monthly Into an S&P 500 ETF Could Grow to $835,000 in 30 Years

The Math Behind Three Decades of Consistent Investing

Over the past 30 years, the S&P 500 has delivered a 1,810% total return—a compound annual growth rate of 10.3%. Put this into perspective: if you committed $400 each month to an S&P 500-tracking fund following this historical trajectory, you’d accumulate roughly $77,000 after 10 years, $284,000 at the 20-year mark, and approximately $835,000 by year 30.

These figures aren’t hypothetical speculation. They’re grounded in decades of market performance spanning diverse economic cycles—recessions, recoveries, technological shifts, and geopolitical events. If similar conditions prevail over the next three decades, comparable results remain plausible for long-term investors.

Why the Vanguard S&P 500 ETF Dominates the Index Fund Landscape

The Vanguard S&P 500 ETF (VOO) tracks 500 of America’s largest publicly traded companies, providing exposure to roughly 80% of the domestic equity market and 40% of global equities by market capitalization. When considering ETF vs mutual fund structures, exchange-traded funds like Vanguard’s offering distinct advantages: lower expense ratios, intraday trading flexibility, and tax efficiency. Vanguard’s iteration charges just 0.03% annually—meaning a $10,000 investment costs only $3 per year.

The fund’s top 10 holdings reveal why it captures the market’s essence:

• Nvidia: 8.4% weight
• Apple: 6.8%
• Microsoft: 6.5%
• Alphabet: 5.0%
• Amazon: 4.0%
• Broadcom: 3.0%
• Meta Platforms: 2.4%
• Tesla: 2.1%
• Berkshire Hathaway: 1.5%
• JPMorgan Chase: 1.4%

These 10 stocks represent 41% of the index by market capitalization—a concentration that prompts debate among investors. However, these companies also generate roughly 33% of the S&P 500’s total earnings, suggesting their valuations reflect genuine competitive strength rather than speculative excess.

Why Warren Buffett Keeps Recommending This Approach

The legendary Berkshire Hathaway investor didn’t endorse S&P 500 index funds casually. His consistent recommendation stems from a practical reality: beating the market is extraordinarily difficult, even for trained professionals. Fewer than 15% of large-cap mutual fund managers outperformed the S&P 500 over the past decade—a damning statistic that undermines the case for active management.

In his 2013 shareholder letter, Buffett articulated this philosophy clearly: “The goal of the non-professional should not be to pick winners. They should instead seek to own a cross-section of businesses that in aggregate are bound to do well. An S&P 500 index fund will achieve this goal.”

The track record backs this advice. The S&P 500 has never posted a negative return over any 15-year holding period since its 1957 inception. This consistency makes it the default choice for investors lacking either the time, expertise, or temperament for stock-picking.

The Structural Edge: ETF Architecture Over Mutual Funds

When evaluating ETF vs mutual fund options for S&P 500 exposure, the modern ETF structure increasingly wins on cost and convenience. Traditional mutual funds often charge higher expense ratios and require you to trade at day-end pricing. Vanguard’s ETF format eliminates these friction points while delivering identical index performance at rock-bottom fees.

Morningstar analyst Brendan McCann captured this sentiment: “This exchange-traded fund accurately represents the large-cap opportunity set while charging rock-bottom fees, a recipe for success over the long run.”

A Balanced Strategy: Index Funds Aren’t the Whole Portfolio

Interestingly, committing entirely to an S&P 500 ETF doesn’t preclude individual stock ownership. Many successful portfolios blend both approaches: maintaining a core S&P 500 index position while allocating a smaller percentage to individual stock picks. If your selected stocks outperform, your overall portfolio beats the benchmark. If they underperform, the index fund acts as a performance anchor, preventing catastrophic underperformance. This hybrid approach appeals to investors wanting conviction plays without taking on undue concentration risk.

The Bottom Line

Warren Buffett’s endorsement of S&P 500 index funds reflects neither laziness nor conservatism—it reflects mathematical reality. The combination of broad diversification, minimal fees, and proven long-term returns makes funds like Vanguard’s S&P 500 ETF the most sensible wealth-building vehicle for the vast majority of investors. Whether you invest $400 monthly or use a lump sum, the principle remains constant: time in the market, powered by compound growth, transforms modest contributions into substantial wealth.