The largest investment bankers, brokers and banks also make money off of those index funds. I often feel those big players manipulate the index funds. Especially with the super computers, IA and program trading. Quite possible you are simply ridging the coat tails of the largest fund managers. But, as you say, you are making money. Those players can pick some unknown, obscure stock (or several) and give them a bounce at the end of the trading day. In a day or two that obscure stock drops back into it's unknown territory. Look at the stocks who's volume and share price pop's up enough to influence the price of the index fund. This is being done randomly so as to not raise suspicion of market manipulation. They will play different index funds randomly. Just today the DOW fell sharply to exactly where yesterday's close was. Like a basketball hitting a hardwood floor. Nothing random. As the economy cools down, they will do the same thing on the down side. No one makes money in a market that runs flat. Knowing, before hand, about the move is good information to have.I am not sure I understand your question, but I will answer it the best I can.
I save a certain percentage of my income. Indeed, if you want to know how soon until you will be financially independent, there is only one number you need to know, What Percentage of Your Income Are You Saving?
The Shockingly Simple Math Behind Early Retirement
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That percentage, invested in index funds, means financial independence at a certain point in the future.
Now, there is a temptation to think, "I am smart. I can beat the index." To which I reply, years from now, do the math, and you will find that over time you cannot beat the index. Your shortcut to be less disciplined and and save less will end up biting you in the ass.
I used to be very active. I remember a year when I had over a 100% return, for the year. I remember for a brief time thinking this market stuff was easy, or I was a genius, or . . . well, you get the idea. When I also lost 75% in a year simple math tells you that even a 100% return will not make up for the loss.
Most folks never sit down to figure out what their real returns are.
There is a lot of research out there about active trading, and it all points to one thing, nobody beats the market averages for very long. The few that beat it right now will not be the same few who beat it in 2025. There is no way to consistently pick winners and losers for a 20-30 year timeline of investing.
But the good news is that you do not have to.
Market returns will get you to financial independence. It is just a matter of how much you save each year and how long you save. If you want to shorten the time, then increase the savings. Read the shockingly simple math and make your own choice.
So what is attractive to me is that I can buy index funds with very low to almost zero transaction costs, get the market returns for that index (including the high fliers - I resisted buying Apple - yes, the temptation to be active is always there- by looking at my index fund holdings and realizing Apple was the top company held as a percentage of the index), and, even with markets going up and down, my plan will get me where I need to be.
No, it is not exciting enough to have my own Tic Toc page, "Buy Index Funds With A High Percentage Of Your Income!" - but it works. None of those folks talking about their successes will ever share their failures with you, nor will they share enough information for you to figure out how they have actually done over the last 20 years, like the real math, not their selective memories of a few good investments.
And the reality is that if we taught all Americans to save and invest from the time that they are young, just about everybody would be millionaires by middle age. Instead, we teach them to take out loans to by trucks, student loans to go to college, credit cards, a mortgage on a house that is too big (1950 average house size was 1100 sq ft) and never get ahead. Because all of these payments are going to banks, they feel like they cannot save, and so they look for shortcuts (commodities like copper, bitcoin, active trading, and so on).
Just look at the Shockingly Simple Math, decide how many years, set the percentage to invest automatically, and put it in an inexpensive index fund like VTSAX (0.04% expense ratio). Then keep at it.
Americans bitch about "the rich" getting tax breaks while not taking advantage of tax free money in 401(k) and IRA and HSA. The reality is that any family of $100,000 in income or less should not be paying any income taxes - just take advantage of the tax shelters that are already available.
So, boring. I get it. But I have a six figure income and paid only $308 in federal income taxes last year. I also can pinpoint just about what year I will be wealthy enough to not need to work just to eat and keep a roof over my head and live.
JMHO
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