I believe in learning about investing early.
Here’s what I mean.
When my daughter Jordan was in the sixth grade, I had her start trading paper shares and building an investment portfolio.
And for a few years, we talked just about every night around the dinner table about her stocks’ performance – and the “whys” behind that performance… their financials and growth rates.
We even pored over their charts.
We eventually fell out of that practice as Jordan pursued sports, music, and friends (and her smartphone).
But now, as she’s pursued a degree in finance from the University of Portland, we’ve started our chats again. Not every night – but pretty often.
I couldn’t be happier – or prouder.
Recently, in fact, I helped Jordan with her senior project – investing “$100,000” in a virtual portfolio.
It will come as no surprise to you that the first words out of my mouth were, “Jordan, the road to wealth is paved by tech.”
After all, that’s been my mantra here at Strategic Technology Investor since Day 1.
Working together, we came up with a plan to turn that virtual portfolio into at least $1.6 million by the time she turns 61.
It was a good exercise for Jordan… and for me. I had to confront a skeptical audience – all daughters are skeptical of their fathers – and prove my thesis.
With that in mind, I’m going to do that again today – prove to you how and why the road to wealth is paved by tech.
Why This Is so Important to Me
While her assignment was virtual, I truly hope Jordan carries it forward into reality.
I don’t want her left behind.
After all, Jordan’s generation is woefully unprepared for savings and retirement.
A recent survey by GoBankingRates reveals that young people today are in deep financial trouble.
The survey showed that 58% of millennials have less than $10,000 saved for retirement. Of those, nearly 20% said they have zero cash in the bank.
But they are far from alone.
The same survey found that 42% of adults overall have less $10,000 in retirement savings.
I truly hope that doesn’t apply to you.
But if it does, you’re in the right place.
In our twice-weekly chats here, I show you market-crushing investments that can use to build your retirement nest egg, or pay for your kids’ college tuition, or even use for that month-long European vacation you’ve always dreamed of.
That’s up to you.
Here’s how it works.
A Wealth-Generating Machine
To me, Americans’ lack of retirement savings is incomprehensible.
See, U.S. stocks compose one of the greatest wealth engines in the world today.
If all these folks did was buy an exchange-traded fund (ETF) tied to the S&P 500 just five years ago, they would now be sitting on 84% gains.
That’s pretty respectable, but Silicon Valley is an even bigger, faster wealth engine.
If you had put your money into a tech-heavy Nasdaq Composite ETF five years ago, you’d have more than doubled their money in the period – with profits just shy of 140%.
At that rate, every $10,000 invested becomes $24,000 in just five years.
Longer term, the results are even more impressive. Since the Nasdaq began operations in February 1971 as the world’s first electronic stock market, the profits are nothing short of amazing.
Had you put $10,000 into a basket of tech stocks back then, you’d be sitting on $544,800. That same money put into the S&P would be worth a little more than half that amount, coming in at $277,700.
Silicon Valley has been outperforming the rest of the market in the turbulent year we’ve seen so far, too.
In 2018 so far – even with the late-January correction and trade-war and interest-rate hike fears since then – the Nasdaq’s 8.4% gains are more than double the S&P’s 3.3% bump.
As you can see, my plan for Jordan to become a millionaire by the time she retires – via investments in Silicon Valley-style technology – is actually pretty conservative.
Here’s why that’s true.
From Mom’s Basement to Billions… Overnight
And the reason for the difference is simple but profound.
Silicon Valley is the engine of the world’s wealth.
It’s the one place in the world where millionaires create themselves virtually overnight.
In Silicon Valley, an entrepreneur can start in a garage with a just a few hundred dollars in seed capital – and become a billionaire just a few years later.
That’s because Silicon Valley – and its extensions around the globe – is the fountainhead of innovation. Everything from chips and sensors to software and cloud computing, from machine vision and artificial intelligence to mobile apps and driverless cars. It’s all coming out of one place.
Consider that, according to one estimate, there are now 169 privately held startups, mostly in tech, that are now worth $1 billion or more. That’s a 275% increase since 2014.
Just the top 10 alone have a combined value of $309.5 billion. And my guess is that the seed venture capital for the whole group was just a few million dollars.
Of course, most Main Street investors don’t have access to these kinds of venture capital deals because they are not Silicon Valley insiders or wealthy individuals with access to high-flying hedge funds.
That’s why, here at Strategic Tech Investor, I try to turn the tables to your advantage by showing you fast-growing tech companies that are simply crushing the overall market. And I go way beyond the so-called FANG stocks that the mainstream financial press shoves in your face day in and day out.
And I go even further than that for the paid-up members of my premium services.
I know a lot of you are on the road to wealth already. I hear from you all the time – about the money you’ve saved… and about the gifts you’ve been able to give your loved ones and yourselves.
If you want to join those folks – now that I’ve removed any skepticism you might have yourself – this is a terrific way to get started…
Demolish Your Skepticism – and Get Confident
You can’t go wrong with the iShares U.S. Technology ETF (Nasdaq: IYW).
Just as its name implies, the fund is focused on domestic (i.e., Silicon Valley) tech leaders.
Holding nearly 140 stocks, this well-run fund also gives us access to less famous names, like graphics-chip maker Nvidia Corp. (Nasdaq: NVDA), cloud leader Veeva Systems Inc. (Nasdaq: VEEV), and mobile software firm InterDigital Inc. (Nasdaq: IDCC).
This is a great way to start building wealth quickly. Over just the past two years, IYW has gained 71%. That’s nearly double the S&P 500’s 37% profits over the period.
Using this ETF as a starting point will put you well on the road to wealth.
So, the next time you read about the millions of American who are nowhere prepared for retirement, you know just what to do – invest in tech for the long haul.
And then show your skeptical kids and friends how you got there.
*This has been a guest post by Money Morning*