This ETF Could Very Well Make You a Multimillionaire With Almost Zero Effort

Most times, anything you hear about easy money is some sort of trap or scam. But that's not always the case.

Steady investments into a good exchange-traded fund (ETF) can put building wealth on autopilot, a direct route to financial freedom with virtually zero effort. Simply set up automated monthly purchases in your portfolio and wait for the companies within the ETF to grow, allowing your money to compound and your next egg to increase over time.

But which ETF is the right one? Consider the Vanguard Total Stock Market ETF (NYSEMKT: VTI), a one-stop shop that creates a diversified portfolio with a single ticker symbol. Vanguard is an industry giant, a trusted brand you invest in. This ETF also has a very low expense ratio, meaning you'll reap almost all the rewards as your investment grows.

Here's how to set yourself up to become a future multimillionaire in just a few steps.

Image source: Getty Images

First, understand what you own

You should always know what you invest in, even if it's an ETF like the Vanguard Total Stock Market ETF. This ETF's name takes out much of the guesswork. The Vanguard Total Stock Market ETF holds over 3,500 U.S. stocks of various sizes across all market sectors.

That means that each share of the ETF includes a tiny slice of many of America's most prominent companies. You'll own bits of the "Magnificent Seven" stocks; smaller, up-and-coming companies; blue chip dividend stocks; and everything in between.

The ETF only includes U.S. stocks, but many of the largest, most prominent U.S. companies do business globally. It's about as close to a one-stop shop for your portfolio as you'll find.

Then, it's about knowing the numbers and getting started

Despite its immense diversity, the Vanguard Total Stock Market ETF has generated annualized returns of 9.25% since its inception in 2001. Since the U.S. stock market is expensive compared to its historical norms, I'll assume that the ETF's annualized returns drop to 8% moving forward.

Here are some different sets of numbers, all assuming you start investing from zero. If you're younger, you can invest less because you can wait longer for your money to grow. On the other hand, you can still make up ground if you're older; you'll just need to invest more to achieve similar results.

Data source: Author created the table using calculations from a portfolio simulator.

You can manually invest each month, but automating your savings makes the required effort as close to zero as possible. Out of sight, out of mind, as they say.

Getting started is the most crucial takeaway. Remember, even though the stock market has risen a lot in recent years, volatility is just part of the ride. The U.S. stock market's ups and downs throughout history have still resulted in remarkable wealth creation over multiple decades.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.