The simple investing strategy anyone can use to get rich

There's a chasm of difference between deciding that you 'want to invest' and actually mapping out an investing strategy and buying your first investment.

Everyone knows that investing in the stock market is probably a good idea for one's long-term wealth potential. However, getting from that stage to your first purchase involves becoming familiar with a whole lot of jargon, opening a brokerage account, finding some money, selecting an investment, and buying it. Many Australians simply get lost along the way and decide it's all a bit much.

That's a real shame, because investing is indeed one of the biggest favours you can do for yourself and the long-term wealth of you and your family.

There are countless paths one can take after deciding that investing in the stock market is a good idea. There's long-term investing in blue-chip stocks, day trading, buying thematic exchange-traded funds (ETFs), buying growth stocks, and buying value stocks. The list goes on. Today, though, I'll outline a simple pathway to building wealth using the share market that anyone can follow and use to become richer over time.

This path involves just one investment. It is the Vanguard Diversified High Growth ETF (ASX: VDHG). You may have come across the term 'index fund' in your investing journey. An index fund is an ETF investment that represents an entire stock market. For example, an Australian index fund typically consists of small investments in the largest 200 or 300 companies listed on our stock exchange. That's everything from Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH) and Ampol Ltd (ASX: ALD).

Building wealth with this simple investing strategy

These index funds rebalance themselves over time without any input required from their investors. This makes them great options for investors who want to build wealth but don't want to learn the ins and outs of stock picking.

The Vanguard Diversified High Growth ETF is a collection of index funds, housed under the one VDHG umbrella. One of its index funds is an Australian fund indeed, covering the shares we listed above and more. But it also includes other index funds that cover international share markets (including the US with stocks like Apple, Coca-Cola, and Amazon), smaller international shares, and shares from emerging markets (such as India, Taiwan, and Brazil). It also adds diversification with index funds that track bonds (investment loans to governments and companies)

All in all, investing in VDHG means investing in thousands of individual stocks and bonds, all under one easy roof. Since this index rebalances and refreshes itself over time, it requires no ongoing maintenance from its investors. So you can buy this Vanguard index fund and just 'set and forget'.

The strategy to build wealth with this fund is simple. Buy units through your brokerage account as soon as your finances allow, and then invest as much and as regularly as possible. Never sell if you don't absolutely need the cash, and reinvest any and all dividend distributions you receive. If an investor follows this roadmap, there's a good chance they will make a meaningful difference to their wealth over time.

To illustrate, the Vanguard Diversified High Growth ETF has returned an average of 9.86% per annum (as of 30 June) since its inception in 2017. If we assume that rate of return holds going forward (which is not guaranteed by any means), an investment of $1,000 per month would build to an investment worth more than $2.2 million over 30 years.

Anyone can follow this investing path, and I think it would serve any Australian with the discipline and patience required to hold to this strategy extremely well.