This is how the stock market could turn $150,000 into $500,000 | Smart Switch: Personal Finance

(Adam Levy)

The stock market is one of the best ways to build wealth. When you invest your money in a stock, you become part owner of the company. You have executives and managers doing all the hard work for you while you sit back and watch your wealth accumulate.

In fact, investing in the stock market can help you turn a $5,000 annual investment into half a million in just 30 years. That is how.

where to invest your money

Choosing a good company with stock available at a fair (or better) price takes a lot of time and research. If delving into quarterly reports, learning about individual companies, and valuing stocks isn’t your cup of tea, there’s a much simpler solution. you can buy a index fund.

Image source: Getty Images.

An index fund is designed to invest in many securities at once. Specifically, it will invest in most (if not all) of the securities represented by a specific index. A stock index tracks the performance of a group of securities designed to represent a certain segment of the market. For example, him S&P 500 Index tracks 500 (or so) of the largest publicly traded US companies. The MSCI EAFE Index tracks companies based outside of the US and Canada.

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