Could Investing $10,000 in This Leveraged ETF Make You a Millionaire?

Investing successful the S&P 500 scale tin beryllium a elemental mode for astir semipermanent investors to physique wealth. The mean instrumentality for the S&P is astir 10% per year, which includes up years and down years. If you've got capable time, that tin marque you a millionaire.

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But if you privation to execute millionaire presumption faster, 1 imaginable strategy is to usage a leveraged exchange-traded money (ETF) similar the ProShares Ultra S&P 500 (NYSEMKT: SSO). This leveraged ETF gives you a accidental to gain treble the regular show of the S&P 500.

However, leverage is not a escaped lunch. These types of ETFs spell up faster erstwhile prices of constituent stocks rise, but they besides diminution faster erstwhile stock prices spell down.

There are nary guarantees successful investing, but let's look astatine however investing successful the ProShares Ultra S&P500 ETF could marque you a millionaire (while knowing its risks).

The ProShares Ultra S&P 500 has been disposable to investors for astir 20 years. Since its inception successful June 2006, the ETF has delivered mean yearly returns (by nett plus value) of 14.5%. That's importantly much than the S&P 500's semipermanent mean of 10% per year.

There's nary warrant that this oregon immoderate different ETF tin proceed to present the aforesaid mean yearly returns forever. But for this exercise, let's presume you put $10,000 successful it and it keeps delivering 14.5% per year, connected average, for the adjacent fewer decades. After 10 years, your archetypal $10,000 concern would turn to $38,730. After 25 years, you would person $295,214. And aft 35 years, it would beryllium implicit $1 million.

Here's 1 large occupation with the ProShares Ultra S&P 500 ETF for astir investors: It requires you to instrumentality risks by utilizing leverage. That means the ETF borrows wealth to bargain stocks. Leverage tin assistance you go a millionaire faster, but it tin besides marque your investments diminution faster.

The S&P 500 scale is down astir 3.8% twelvemonth to date, portion the ProShares Ultra ETF has declined by astir 9%. It's casual to get excited astir utilizing leverage to supercharge your gains, but tin you truly tummy the imaginable losses?

This ETF delivers doubly the regular instrumentality of the S&P 500. When that instrumentality is positive, you mightiness consciousness great. But erstwhile the instrumentality is negative, your relationship equilibrium drops doubly arsenic accelerated compared to a regular S&P 500 scale fund. Not each capitalist is emotionally prepared to thrust those inevitable downturns. For the archetypal 5 years since SSO was launched successful 2006-2011, the money declined by much than 40%.