1 No-Brainer Wealth-Building ETF to Buy Right Now for Under $1,000

The S&P 500 it is one of the most reliable wealth building mechanisms the world has ever seen. It’s very simple: an index of the 500 most prominent companies in the US at any given time. The companies in the S&P 500 have changed over the years, but the index’s long-term results — amazing wealth — remain the same. A $100 investment made in 1950 would be worth over $32,000 today, and that’s not even taking into account dividends.

It is a peak of the ceiling for America’s capitalist economy, which has grown to become a global financial powerhouse despite the fact that the US is one of the newer countries on the world stage.

The best part? Anyone can invest in the S&P 500 through exchange-traded funds such as SPDR S&P 500 ETF Trust (SPY 0.44%).

Once you know how and why, you’ll realize it’s the easiest investment you can make for under $1,000.

A short list of step-by-step instructions for building wealth:

Building wealth with the SPDR S&P 500 ETF Trust is simple.

1. You buy stocks and then you wait.

No, really. It’s that easy.

Ok, there is a slight nuance. Depending on your budget, you can buy a whole share of the ETF, which currently costs about $550, or you can break it up into smaller dollar-based purchases if your brokerage allows fractional shares. Whether you invest your $1,000 as a lump sum or spread it out (using dollar cost averaging) is up to you. Either way, you’re very likely to make money over time.

Market timing is everything

Many people can’t believe how simple investing can be and let emotions and indecision get in the way. Look at all the negativity in the media! Watch the news any day and you’ll find half a dozen reasons not to buy stocks right now. But statistically speaking, now is the best time to invest.

A study conducted by Schwab analyzed market timing by examining the results of two hypothetical people who invested annually for 20 years. Person A invested at the lowest price of the S&P 500 every year (super lucky), while Person B invested at the highest (super unlucky). Over 20 years, the super unlucky investor ended up with over 81% of the money of the one who invested perfectly!

Remember, this is the worst case scenario with impossible odds. The same study showed that someone who invested randomly ended up with almost the same bottom line as the super-lucky investor.

What is the moral of the story here? Simply investing as much as possible is the biggest factor in how well you do. You could be incredibly lucky in timing your investments and yet it would make little difference to your long-term results.

You can do even better with $1,000

Over the past 50 years, the S&P 500 has averaged an annual return of 10%. So over time, your investment could double every seven years or so. That means $1,000 could grow to $32,000 over the next 35 years! However, you could do even better. Regularly adding to your savings can add fuel to the fire and overburden your wealth in the long run.

Consider this.

Let’s say you invest $1,000 today and then add $100 monthly for 35 years. It’s like eating fast food for dinner one less time a week. Assuming the same returns, your portfolio would grow to over $412,000!

The cool thing about the S&P 500 is that it’s so consistent over time that it doesn’t need flashy reversals to do big things. It is remarkably boring, but most professional fund managers fail to overcome it in the long run. Investing in the SPDR S&P 500 ETF Trust is never a bad idea, so put that $1,000 to work and try to find a way to steadily build on it as time and America’s top companies work hard to get rich.