Your bonuses, when invested wisely, can be a powerful tool in accelerating your journey towards financial independence.
The chart below shows how a $10,000 USD investment in the Vanguard Total Stock Market Index ETF – a globally diversified passive fund representing 98% of the world’s listed companies – has grown over the past 10 years, from early 2015 to late 2024:
If you had repeatedly invested your annual bonus each year over that period, you would have amassed a considerable sum.
Notably, the bonuses invested for the longest time would have achieved the highest growth, demonstrating that ‘time’ really is the secret to investment success.
Why should you care?
Building wealth is not complex, it is achieved through consistently applying simple, positive financial habits.
Allocating a portion of your bonus to long-term investments each year is one such habit – each contribution brings you a big step closer to your financial goals.
The earlier you start, the greater the long-term rewards. As the years go by, you will start to see your bonuses compound in value, helping you to leap ahead towards financial independence.
