Building Long-Term Wealth: Three Vanguard ETFs That Deserve Your $1,000

The Power of Consistent Investing

Ever wondered what happens when you invest $1,000 every month for 30 years? The math is pretty stunning. At a 14.6% annual return—which happens to be the S&P 500’s average performance over the past decade—you’d walk away with approximately $5.2 million by the end. Here’s the kicker: only 7% of that comes from your actual contributions, while a whopping 93% comes purely from market gains. Even if you’re more conservative and expect just 10% yearly returns, you’re still looking at over $2 million.

The secret? Consistency and the right investment vehicles. ETFs (exchange-traded funds) have emerged as one of the smartest ways to build this wealth systematically, especially when you leverage a low-cost provider like Vanguard.

Why the Vanguard S&P 500 ETF Remains a Solid Foundation

Sometimes boring is beautiful in investing. The Vanguard S&P 500 ETF (VOO) proves this point perfectly. Over the past decade, roughly 86% of actively managed funds have underperformed the broader market—yet this single ETF simply tracks the benchmark with surgical precision.

The appeal is twofold. First, your expense ratio sits at just 0.03%, meaning almost all your money works for you rather than paying intermediaries. Second, you’re instantly diversified across approximately 500 of America’s largest corporations. Sure, the index is weighted by market capitalization, so the top 10 holdings account for over 40% of the fund, but that’s simply reflecting market reality.

The track record speaks volumes: 14.6% annualized returns over the past decade, climbing to 17.6% annually over the past five years (as of late September). This isn’t flashy, but it’s dependable.

The Vanguard Growth ETF for Market Momentum

What if you wanted to capture the sectors actually driving the market higher? Enter the Vanguard Growth ETF (VUG). Unlike funds that struggle to beat the S&P 500, this one has consistently outperformed by focusing specifically on the growth side of the market.

The mechanism is straightforward: it tracks the CRSP US Large Cap Growth Index, essentially isolating the growth and technology-heavy portion of the broader market. Tech stocks alone represent over 60% of the fund’s composition. This concentration has been the right call for much of the past decade, delivering an impressive 17.4% average annual return over 10 years and 18.4% over the most recent five-year stretch.

The trade-off? You’re accepting higher volatility in exchange for stronger upside potential during market rallies.

Diversification Through International Value: The High Dividend Yield Strategy

Most U.S. investors have their portfolios heavily tilted toward large-cap growth stocks. That concentration can work in bull markets, but it leaves you vulnerable during sector rotations. The Vanguard International High Dividend Yield ETF (VYMI) offers a different flavor entirely.

This fund holds over 1,500 dividend-paying stocks from across the globe. Geographic exposure breaks down as: Europe (40%), Asia-Pacific (26%), emerging markets (22%), and Canada (8%). These aren’t high-flying growth names—they’re value-oriented companies with a median price-to-earnings ratio of just 12.7 times, significantly cheaper than the broader market.

The diversification benefit has been real this year, with the fund delivering nearly 33% returns as of mid-November. Over the past five years, it’s generated a 16.1% average annual return, providing both income through dividends and capital appreciation without the same volatility as pure growth plays.

The Dollar-Cost Averaging Advantage

Here’s what matters most: none of these funds will work unless you commit to the strategy. Dollar-cost averaging—investing a fixed amount regularly, regardless of market conditions—removes emotion from the equation. You buy more shares when prices dip and fewer when they spike, naturally lowering your average cost.

The real wealth building happens when you stick with this approach through bull markets and bear markets alike. Veer off the path, and you sacrifice the compounding magic that turns $1,000 monthly investments into millions.

Whether you choose the stability of the S&P 500 tracker, the growth acceleration of the VUG, or the international dividend diversification of VYMI—or some combination—the key is starting now and staying the course.