What a $200 Monthly Investment in a Low-Return ETF Looks Like After 25 Years

Here's a thought experiment. Nothing fancy, no options strategies, no crypto, no stock tips. I'm not trying to change your life with incredible returns here. It's just this hypothetical idea: What if you quietly put $200 a month into the most boring fund on the planet, for 25 years straight, and then looked at what you had at the end?

What boring looks like after 25 years

The exchange-traded fund (ETF) I'm thinking of here is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSEMKT: BIL). This fund makes money market accounts look exciting. It holds short-term Treasury bills, collects a little yield, and hands it back to you. This type of Treasury carries low interest rates even at the best of times, in exchange for ultra-stable market value. The share price has been almost flat throughout BIL's history. It's not trying to make you rich. Instead, it promises to not lose your money.

So that's the experiment. Start with nothing. Add $200 a month, reinvesting those tiny distributions along the way, for 25 years. Over the past 19 years (since its launch in 2007), BIL has produced an annualized total return of roughly 1.33%. Those modest $200 sums would add up to $60,000 after a quarter-century. Together with the reinvested payouts, you'd end up with about $71,100. The fund made you more than $11,000 by just existing.

Now imagine you started that account the day your kid came home from the hospital, swaddled in those ubiquitous striped receiving blankets. You keep it up through the sleep deprivation, the soccer practices, the rougher teenage years, and college. After grad school, a pile of seriously useful money is sitting there. It's enough for a car, down payment on a house, a robust emergency fund, or a head start on retirement -- built one boring month at a time.

And again: That's BIL. It's the fund equivalent of a concrete bunker. Safe, stable, and uninspiring.

Image source: Getty Images.

Consistency beats perfection

Take that same discipline -- $200 a month, every month, don't stop -- and put it into something like an S&P 500 index fund instead. I'm still talking about really basic ideas like the Vanguard S&P 500 ETF (NYSEMKT: VOO). These funds are not trying to beat the market at all. They just mirror the returns of the S&P 500 (SNPINDEX: ^GSPC) index with minimal fees.

This way, the long-run numbers get more exciting. Historical equity returns aren't guaranteed, but they've been a lot closer to 10% per year than to 1.5% over the past century. The gap between those two numbers, compounded over 25 years, isn't a rounding error. It's a starter home instead of a down payment.

The secret that isn't really a secret: Most of the heavy lifting in wealth-building comes from consistency and time, not from picking the perfect ticker. Yet, most people don't do it.

Two hundred dollars a month is a real commitment for many households. For others, it disappears into subscriptions and restaurant tabs without much thought. It's also, if you leave it alone long enough, a serious amount of money when you make the effort to save it up.

The boring BIL fund proved it. A better fund or a real investment strategy could do a lot more.

Anders Bylund has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.