This Warren Buffett-approved investment strategy could make you a millionaire with almost no effort

Investing in the stock market is one of the best ways to build wealth that lasts a lifetime, but it can be intimidating to get started if you’re not an experienced investor.

Buying individual stocks requires a lot of research, as you’ll need to study each company you’re interested in to decide if it’s a strong investment. While this approach is a fantastic option for many people, it can be overwhelming for beginners or those who don’t have a lot of time to devote to their portfolios.

Fortunately, there’s a simpler way to invest in the stock market that takes very little time, money and effort — and is even highly recommended by Warren Buffett. Here’s everything you need to know.

Image source: The Motley Fool.

A simple but powerful investment

If you’re looking for a simple way to build wealth in the stock market with a lot less effort, the S&P 500 index fund may be your best bet.

An S&P 500 index fund tracks S&P 500 (^GSPC -0.00%)so it includes the same stocks as the index and aims to mirror its performance over time. The companies in the S&P 500 are among the largest and most powerful in the world, and by investing in this type of index fund, you will own a stake in all 500 of these businesses.

Legendary investor Warren Buffett has long recommended the S&P 500 index fund for new and seasoned investors alike, and in 2008 he even bet $1 million that this investment could outperform a group of five actively managed hedge funds .

Over 10 years, Buffett’s S&P 500 index fund has achieved total returns of about 126%. Hedge funds, on the other hand, had average returns of just 36% over that period.

One of the best advantages of the S&P 500 index fund, however, is that it is a passive investment. Because index funds track specific stock indexes — in this case, the S&P 500 — you don’t have to worry about picking individual stocks. Index funds generally offer much lower fees compared to actively managed mutual funds, which can save you thousands of dollars over time.

How safe is the S&P 500 index fund?

The market is notorious for its volatility, which can be off-putting for new investors. While the S&P 500 is not immune to recessions, it has an impeccable track record of recovering from even the worst downturns.

^ SPX data by YCharts

In fact, if you hold your S&P 500 index fund for at least 20 years, you’re almost guaranteed to make money. Analysts at Crestmont Research examined the historical performance of the S&P 500, specifically its 20-year total returns. They found that every 20-year period in the index’s history ended with positive total returns, regardless of how volatile the market was during those decades.

There is always a chance that sooner or later we will face another recession. But the S&P 500 has a decades-long history of surviving even the most severe recessions, and while nothing is guaranteed in the stock market, it’s highly likely that it will continue to recover from future crashes.

Earn $1 million or more

With enough time and consistency, it is possible to make $1 million or more with this investment.

Since 1928, the S&P 500 itself has earned an average rate of return of about 8% per year. In other words, all the annual highs and lows over the last century have come to about 8% each year.

If you invest in an S&P 500 index fund that earns an average annual return of 8%, here’s what it might take to reach $1 million in total savings:

Data source: author’s calculations via investor.gov.

The earlier you start investing, the easier it will be for you to accumulate $1 million or more. Even if you can’t afford to invest hundreds of dollars a month, contributing whatever you can will add up over time.

S&P 500 index funds are safer and more reliable investments that require less effort than buying individual stocks. By starting now and investing consistently, you could earn more than you think over time.