11 Simple Money Moves to Retire a Millionaire

1.   Invest in Diversified Index Funds

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One simple money move to retire a millionaire is to invest in broadly diversified index funds. Index funds are “pooled investments” that are designed to follow specific rules that replicate the performance of market indexes. Even if an investor knows little about investing, index funds can help them invest easily. To retire a millionaire with the help of index funds, make sure they are

• Low-cost: Index funds typically have expense ratios that are lower compared to actively managed funds. See if you can find an attractive index fund with an expense ratio of less than 0.5%. Low-cost index funds mean more money is invested and is compounded over time.
• Broadly Diversified: When you choose an index fund that is broadly diversified across a wide range of industries and sectors, you reduce the risk associated with investing in individual stocks.
• Consistent Returns: Index funds aim to provide returns that closely match overall market performance. As an investor, look for index funds that have returns of more than 10% annually.

Other factors to look out for when choosing an index fund are its tracking error, tax efficiency, and reinvestment options. The most popular index funds are based on the Standard & Poor’s 500 index. Another option is the Nasdaq composite index. Whatever index funds you choose, make sure they align with your investment goals, risk tolerance, and overall financial situation. In turn, you will be able to build a diversified and low-cost portfolio that will help you retire a millionaire.

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