How to Double a $1,400 Stimulus Check With No Effort

Lawmakers in Washington are moving quickly to provide a third stimulus check. This one will be larger than either of the previous two COVID-19 payments. Indeed, eligible adults and dependents will likely receive $1,400 each. This money could be delivered as early as mid-March or early April.

These stimulus checks are intended to help families struggling with the ongoing impact of the coronavirus. If you need yours to pay your bills or don’t have an emergency fund yet, you should definitely use the funds to cover your living expenses or prepare for a rainy day.

But if you don’t need the money now and won’t need it in the next few years, you can easily turn that $1,400 into $2,800 or more with very little effort. Here’s how.

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You can double your stimulus check in less than a decade

If you want to double your stimulus check in less than a decade, there’s only one thing you need to do. Invest it in a fund that follows S&P500 index (SNP INDEX: ^GSPC).

The S&P500 consists of just over 500 of the largest publicly traded companies in the United States. There are a number of index funds that track the S&P 500, most of which have extremely low expense ratios.

Over the past 50 years, the S&P 500 has provided an average annualized return of 10.9%. And anyone who has invested in it and left their money alone for at least 20 years has made a profit regardless of when they first invested their money. So while there is always some risk involved in investing, the chances of big losses are very low if you invest your stimulus money in a fund that tracks the S&P 500 and leave it alone for a while.

How long, exactly, should you leave your $1,400 invested for it to double? If you get the average returns of 10.9% that the S&P 500 has historically provided, you could double your $1,400 in 7.27 years.

Now, that’s a relatively short timeframe, so your returns may be a bit lower (or a bit higher). But since the S&P 500 has been fairly consistent, even if your investment underperforms a bit, you can be extremely confident that by the end of a decade, you will almost certainly have at least doubled your money.

And if you wait a little longer, say 20 years, your chances of getting the 10.9% annualized return are even higher. After two decades, you’d probably have a balance of just over $11,000, almost eight times the amount you started with.

Of course, you might be able to do even better if you aim to outperform the market by developing a smart investment thesis and investing for the long term in individual stocks that you think will beat the market. But if you don’t want to do anything more than take a few minutes to choose an S&P index fund, you can feel pretty good about your ability to effortlessly double your stimulus check before 2030.

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