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Wealth Advisor: Consider Investing in This Fund in 2022

By: Kathleen Elkins  |  Last Updated: December 16, 2021

If you want to build wealth, you have to invest your money — and the sooner you start, the better your financial future will look. 

Ultimately, when you start investing matters more than how much you invest, thanks to the miracle of compound interest. Compound interest makes a sum of money grow exponentially over time because, in addition to earning returns on the money you invest, you also earn returns on those returns.

So, where should you invest and how do you do it?

Today, thanks to technology, investing is easier than ever. Micro-investing apps (like Acorns and Stash) and robo-advisors (like Betterment and Wealthfront) make it easy for anyone to invest in low-cost mutual funds or exchange-traded funds (ETFs), which are cost-efficient and highly diversified. And you don’t even need a lot of money to get started — most of these platforms have small account minimums (or no minimum at all).

You can also always go the more traditional route and open a brokerage account with a firm like Vanguard, Fidelity, TD Ameritrade or Charles Schwab and select a fund to invest in.

If you do this, money expert and founder of FinishRich Media David Bach has a recommendation: Look into the Vanguard STAR Fund (VGSTX), he said in a recent conversation with Growthday founder Brendon Burchard. 

Keep in mind that this is an investment recommendation “to look at,” he says. Before investing in anything, including this specific fund, you’ll want to do your homework, read the prospectus and reports and make sure it makes sense for your financial situation. If you have a financial advisor, you’ll want to check in with them before investing in anything.  

The Vanguard STAR fund is a balanced mutual fund that is invested 60% in stocks and 40% in bonds, and has an average annual return of 9.8% since its inception in 1985. It’s low-cost (the expense ratio is 0.31%), it has over $26 billion in it and “it’s managed by what I think is one of the best mutual fund companies in the world, Vanguard,” says Bach. 

“Almost the bulk of my wife’s retirement account happens to be in this investment,” he adds.

Of course, “past performance does not equal future performance,” Bach emphasizes. “You need to read the prospectus and you should not invest until you know all the facts.”

You can find the STAR Fund prospectus and reports here. The minimum to invest in this fund is $1,000.

At the end of the day, what matters more than whether or not you decide to invest in this specific fund is that you start investing today. The sooner you start, the more you’ll benefit from compound interest down the line. 

And don’t just make a one-time contribution to an investment account — you want to invest consistently, and the easiest way to do that is to set up an automatic plan. That means having money automatically taken out of your paycheck or checking account and deposited into your investment account so you never have to think about it.

For more ideas on how to invest your money, read Finishrich.com’s guide to investing at every age.