Okay, that title is clickbait. It is true though, you can grow a significant portfolio by investing one hour’s income a week. But this approach takes way more time than the optimistic results promised by the typical get-rich-quick scheme you’ll find online.

The US stock market has returned close to 10% annually for about a century now. Though it can be a choppy ride, it still looks like the best game in town for growing wealth. Nobody knows what the market returns will be going forward. But you could do worse than sticking some money into a low-cost S&P 500® index-tracking fund every week. There are no guarantees here but if nothing else, over the long haul, the odds are that it will provide a better return for more people than would buying lottery tickets. It would certainly be a better use of money than smoking or vaping!

It’s easy to talk about investing for big returns if you have a big salary. What if you’re on minimum wage? Sure, the size of the cheque can change the game. But it is the length of time you’re in the game for that produces the best result, regardless of how much you can invest. Starting early is a really big deal with this approach. The less money you make, the more critical it is that you start sooner. Let’s be real here, we would all rather have the bigger paycheque. But you’ll find some highly-paid people hitting retirement age in poor financial shape too. A kid finishing high school starts working & making money years ahead of someone who commits to a primary degree, a masters & a doctorate. Imagine our high school graduate living at home for those same years. While our university student is borrowing money to pay for an education. If our high-schooler starts working & investing earlier, & it doesn’t have to be a huge amount, it is possible for that kid to retire with a bigger nest-egg than the university graduate. Is this just a pipedream?

Okay, let’s look at it another way then.

The average minimum wage across Canada’s provinces & territories, by the end of 2022, will be about $14.36 per hour. Starting at age 20, saving & investing the equivalent of one hour’s work a week could turn into more than half a million dollars by retirement day. That’s not too shabby, eh!
Yes, I know it’s tough to save on minimum wage. But a kid who can save & invest, even a little, but consistently, all the way to age 65, might look forward to a more comfortable retirement. Can you save & invest the equivalent of one hour’s work a week to grow your wealth? If you want to boost your returns, get more invested while you are younger. What it would be like if you saved two hours wages a week from an early age? Imagine how it might turn out if you also invested more of your bonus money, your raises, or your tips?

Don’t imagine, test drive some numbers on a compound growth calculator. You don’t have one on your phone yet? Fix that!

The chart below shows how little you need to save, represented by the grey shaded area, to grow your retirement nest egg significantly. The orange area is the market growth contribution to the portfolio over time. Consistently saving & investing that one hour’s pay, every week, totals about $34k invested over a working lifetime. The market can turn those savings into a retirement portfolio worth about $650k. Amazing what can happen when you have 500 companies working for you! This chart uses the $14.36 per week, compounded quarterly, with a 10% rate of return. You’ll see that the real juice of compounding comes on over time. The earlier you start, the better the chances of a good result.

The unfortunate thing with this approach is that does take time. It feels like it’s not doing a whole bunch of anything in the early years. It’s just not exciting. In fact, it can be downright boring. Especially if your buddy is making a fortune in crypto or whatever the current meme stock is. Though market crashes can introduce a little excitement to the mix from time to time! This is one of those things that you need to set & forget. And keep on keeping on. But we’ll get to more about all that in another post.

Important – this is not investing advice, it is for entertainment & educational purposes only. Do your own due diligence & seek professional advice before investing your money. All the above assumes investing inside a tax sheltered account, with low or no transaction costs & no additional fees outside of those inside the low-cost index tracking fund.