These days, there are lots of promises floating around the internet to “double your money” quickly. Some offer ways to produce even larger returns on your investment.
If you’ve been a user of the internet for more than five minutes, you know most of these claims are designed to do the exact opposite. To use a timely example, it should not come as a surprise that buying digital images of monkeys has a very low return on investment.
But there are proven methods to double your money if you’re patient enough.
Image source: Getty Images.
S&P 500 index funds
The closest thing to a sure thing in the stock market is simply betting on the market as a whole going up over time. In that respect, it has a perfect record.
Despite countless bear markets and corrections, the S&P 500 has always recovered its all-time highs and trudged higher. Thus, by simply investing in a low-cost S&P 500 index fund such as the Vanguard S&P 500 ETF (NYSEMKT: VOO), you’re nearly guaranteed to double your money given enough time.
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While there’s always the risk of investing right before a market crash, the historical data is on your side. Dating back to 1928, the average bull market has lasted more than 1,100 days, while the average correction/bear market has only lasted 194 days.
So even if you buy right at the peak before a crash, all you need to do is wait, and your investment will likely turn out just fine. And if you’re smart, you’ll keep buying through the ensuing bearish period to make an even higher return.
401(k) employer match
If I could shout it from the mountaintops, I would scream that employer 401(k) matches are quite literally free money.
Image source: Getty Images.
Remember how I said the S&P 500 is as close to a guarantee as it gets? Well, the only other thing that comes close is a 401(k) employer match — when the company you work for matches your retirement contributions dollar for dollar up to a certain point. For example, your employer might match 100% of your contributions up to 3% of your salary. In other words, if you put 3% of your paychecks into your 401(k), your employer will double your contribution.
This is, to my knowledge, the easiest way to double your money, assuming your employer offers this benefit.
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