If you’re wondering how to make money off VOO, you’re in the right place. VOO, or the Vanguard S&P 500 ETF, is one of the most talked-about investment options out there.
It’s simple, low-cost, and tied to the performance of America’s biggest companies. But how exactly can you turn this ETF into a money-maker?
We’ll break it down step by step. We’ll cover the basics, key strategies, and even some tips for beginners stepping up to intermediate level.
Understanding VOO: The Basics
First things first, what is VOO?
It’s an exchange-traded fund from Vanguard that tracks the S&P 500 index. That means it holds shares in the top 500 U.S. companies, like Apple, Microsoft, and Amazon.
When you buy VOO, you’re basically buying a tiny piece of all these giants in one go. No need to pick individual stocks; the ETF does the heavy lifting.
Why is VOO so popular? It has super low fees, just 0.03% expense ratio. That keeps more money in your pocket over time. Plus, it’s easy to trade like a stock on major exchanges.
As of August 2025, VOO has grown a lot, with a year-to-date return of about 9.42%. Over the past year, it’s up around 21.65%. These numbers show why many people see it as a solid way to build wealth.
Way 1: Capital Appreciation Through Long-Term Holding
One of the simplest ways to make money off VOO is through capital appreciation. That’s a fancy term for buying low and selling high.
You invest in VOO now, hold it for years, and watch its value grow as the stock market rises.
History backs this up. The S&P 500 has averaged about 10% annual returns over the long haul, including dividends.
If you put $10,000 into VOO today and let it sit for 20 years at that rate, it could grow to over $67,000. Of course, markets go up and down, but patience pays off.
To get started:
- Open a brokerage account if you don’t have one.
- Buy shares of VOO during market hours.
- Hold tight through ups and downs.
This strategy suits busy folks who want set-it-and-forget-it investing.
Just remember, taxes apply when you sell for a profit. Use a tax-advantaged account like an IRA to minimize that hit.
Way 2: Earning Dividends from VOO
VOO isn’t just about growth; it also pays dividends. These are cash payouts from the profits of the companies in the index.
Every quarter, VOO collects dividends from its holdings and passes them to you.
Right now, in August 2025, VOO’s dividend yield sits at around 1.19%. That means for every $100 you invest, you might get about $1.19 back in dividends each year.
The annual dividend is roughly $6.93 per share. It’s not huge compared to some high-yield funds, but it’s steady and grows over time.
How does this make you money? Reinvest those dividends to buy more shares. This compounding effect can supercharge your returns.
For example, if you start with 100 shares at $500 each ($50,000 total), a 1.19% yield gives you about $595 yearly. Reinvest that, and your pot grows faster.
Pros of dividend strategy:
- Passive income without selling shares.
- Tax-efficient in qualified accounts.
- Adds stability during market dips.
Cons:
- Yield is lower than some dividend-focused ETFs.
- Dividends can fluctuate with company profits.
If you need regular income, set up automatic dividend withdrawals. But for growth, always reinvest.
Way 3: Trading Options on VOO for Extra Profits
Ready for something a bit more advanced? Options trading on VOO can boost your earnings.
Options are contracts that give you the right to buy or sell VOO at a set price by a certain date. You don’t need to own the shares to start, but it helps.
A popular move is covered calls. You own VOO shares and sell call options on them.
Buyers pay you a premium upfront. If the price doesn’t rise much, you keep the premium as profit. It’s like renting out your shares for income.
Another tactic: Selling put options. You agree to buy VOO at a lower price if it drops. You collect a premium either way, and if it hits, you get shares at a discount.
VOO options are liquid, meaning easy to trade with tight spreads. But options involve risk; you could lose money if markets move against you.
Steps to trade options on VOO:
- Get options approval from your broker.
- Research strikes and expirations on platforms like Nasdaq or your broker’s tool.
- Start small, maybe with one contract (covers 100 shares).
This can add 2-5% extra return yearly, but only if you’re comfortable with volatility.
Way 4: Securities Lending to Generate Passive Income
Here’s a lesser-known gem: securities lending. If you hold VOO in a margin account, you can lend your shares to short sellers or institutions. They borrow them, and you get paid interest.
Vanguard and some brokers offer fully paid lending programs.
For VOO, this can add 1-5 basis points to your annual returns, based on demand. It’s tiny, but it adds up on large holdings. For a $100,000 position, that’s $10-50 extra per year.
The process is hands-off. Your broker handles it, and you still own the shares.
Risks? Borrowers might default, but collateral covers that. Plus, you might miss dividends if shares are lent out, though most programs adjust for that.
Not all brokers do this, so check with yours. It’s a low-effort way to squeeze more from VOO without selling.
Advanced Strategies: Combining Tactics for Better Results
To really maximize VOO, mix strategies. Try dollar-cost averaging: Invest a fixed amount regularly, say $500 monthly. This buys more shares when prices dip and less when high, smoothing out costs.
Or pair VOO with other ETFs for diversification. But stick mostly to VOO for core exposure.
Here’s a small table comparing basic VOO strategies:
| Strategy | Risk Level | Potential Return | Best For |
|---|---|---|---|
| Long-Term Hold | Low | 7-10% annual avg | Beginners |
| Dividends | Low | 1-2% yield + growth | Income seekers |
| Options Trading | Medium-High | 5-15% extra | Active traders |
| Securities Lending | Low | 0.1-0.5% extra | Passive holders |
This table shows options fit your goals. Always track performance; VOO’s 2025 YTD is strong at 9.42%, but past results don’t guarantee future ones.
Tips for Success with VOO
Stay informed. Follow market news, but don’t overreact to daily swings. Use tools like Vanguard’s site for updates.
Avoid common pitfalls: Don’t time the market; it’s tough even for pros. Fees eat returns, so VOO’s low cost helps.
Build a portfolio around VOO. Allocate 60-80% to it for growth, then add bonds for balance.
FAQs About How Do You Make Money Off VOO
Q: What is the current dividend yield for VOO?
As of August 2025, VOO’s dividend yield is about 1.19%, paid quarterly.
Q: Is VOO a good long-term investment?
Yes, for most people. It tracks the S&P 500, which has historically returned around 10% annually. But diversify and consider your risk tolerance.
Q: How do I start trading options on VOO?
Open a brokerage account with options approval. Study basics, then use tools to pick contracts. Start with covered calls for lower risk.
Q: Can I lose money with VOO?
Absolutely, like any stock investment. Markets fall, but VOO’s diversification helps. Never invest more than you can afford to lose.
Conclusion
Making money off VOO boils down to smart, patient investing. Whether through growth, dividends, options, or lending, this ETF offers multiple paths to profit.
Start small, learn as you go, and watch your money work for you. With strong 2025 performance so far, VOO remains a top pick for building wealth.
Disclaimer: This blog is for informational purposes only and not financial advice. Investing involves risks, including loss of principal. Consult a qualified advisor before making decisions. Past performance doesn’t predict future results.
Savita is a passionate finance writer with a strong background in the world of money management and financial planning. With over 4 years of blogging experience, she has been helping readers simplify complex financial topics and make smarter money decisions.
