Adria Cimino, The Motley Fool

Thu, Jun 19, 2025, 3:10 AM5 min read

• Warren Buffett has always believed in the strength of American companies.

• By using certain Buffett techniques, you could significantly grow the value of your portfolio over time.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

Warren Buffett's investing techniques have resulted in big gains for Berkshire Hathaway over the long term and a billion-dollar portfolio. So you may be wondering this: Could one very easy Buffett-approved investment turn $300 per month into $1 million? The answer is yes, if you follow certain key steps.

This particular investment is an S&P 500 index fund, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). When you buy shares of this fund, you're betting on the long-term growth of American companies, something Buffett has done throughout his investing career through individual stocks and exchange-traded funds, including this Vanguard one. This has helped Berkshire Hathaway post a compounded annual gain of nearly 20% over the past 59 years.

Now it's our turn. Let's find out how you can start with $300 and potentially end up with $1 million.

First, let's consider why Buffett recommends such an instrument in the first place. The top investor strongly believes in stock picking, but he also emphasizes that investing in a fund that tracks the S&P 500 is the perfect way for nonprofessional investors to gain exposure to America's best companies. You don't have to worry about picking tomorrow's winning stocks -- and this investment also automatically offers you instant diversification across stocks and industries.

It's important to remember that the S&P 500 includes the companies driving the economy of the times -- and the index rebalances quarterly, meaning when you invest in this benchmark, you'll always be invested in the most compelling stocks of the day. Over time, the S&P 500 has delivered an average annual return of 10%, so it's clearly rewarded long-term investors.

Of course, you won't directly buy shares of the index but instead shares of an ETF that tracks the index's performance. The Vanguard S&P 500 ETF holds the same stocks that are in the benchmark and at the same weight, so it can do this job.

Buffett not only recommends this sort of fund to others, but as mentioned above, he's been an investor in S&P 500 ETFs. To further illustrate his commitment to this strategy, he says he's directed a trustee, upon his death, to put most of his cash into such a fund for the benefit of his wife.