Let’s get real: Most European retail investors dreaming of US-level wealth from the S&P 500 are buying into a myth — and the numbers in EUR are the rude awakening.
Every TikTok influencer and bank advisor in Europe has the same tired advice: “Just buy the S&P 500, sit back, and watch compounding work its magic.” But when you crunch the actual euro-denominated returns, factor in FX swings, EU taxes, and ongoing ETF fees, the fairy tale starts to unravel. So, can S&P 500 investing in Europe really make you rich? Or are we just flattering Wall Street’s marketing machine?
If you’re after evidence – hard EUR returns, not Wall Street hype – let’s tear down the myth and see what’s left standing.
S&P 500 in EUR: The Numbers Are Not What You’ve Been Sold
Let’s start with brutal honesty: the S&P 500 is a stellar wealth-builder in USD. But that’s not the currency you’ll retire in. What’s the truth for the European investor who buys a UCITS S&P 500 ETF (say, iShares CSP1 or Vanguard VUSA) from a broker in Paris, Berlin, or Milan?
From January 2013 to January 2024, the S&P 500 (EUR-hedged, dividends reinvested) returned roughly 12.2% annualized, compared to 13.2% in USD.
But for Europeans buying unhedged S&P 500 ETFs (the vast majority), returns swing wildly with the EUR/USD rate.
Case in point: in 2022, the S&P 500 lost about 18% in USD, but for euro investors, the loss was cushioned to just 13%. Why? Because the euro crashed against the dollar, masking US market pain. But go back to 2017–2020, the euro rose sharply, slashing your “USD” gains when translated into EUR.
Long-term, those FX swings can eat or amplify your S&P 500 returns in unpredictable bursts. And unless you’re a professional currency trader, you’re at the mercy of the FX gods.
The Real Wealth Drag: Taxes, Fees, and the Swiss Cheese of “Passive” Returns
Here’s another dirty secret: UCITS ETFs are not tax magic. In France, Germany, or Spain, capital gains on ETFs are taxed like any other asset. Dividends? Often hit by 15% US withholding tax plus your local rate (Germany: 25%, France: 12.8% plus social charges). And let’s not pretend you’re paying zero to “just hold” — even low-cost ETFs like VUSA or CSP1 charge 0.07%–0.10% in TER, plus hidden FX conversion costs from your broker (often 0.25%–0.50%).
Even a “cheap” €100,000 S&P 500 ETF position can bleed €400–€800 a year in taxes and fees — that’s before you’ve touched a cent of your gains.
The end result? That 12–13% average annual return in headlines is more realistically 9–10% for a disciplined European investor, after costs and taxes. And that’s in the bull market of the century.
Myth vs Reality: No, the S&P 500 Won’t Make You a Millionaire Overnight
Let’s do the math. Suppose you invest €10,000/year into an S&P 500 UCITS ETF, for 20 years, with a realistic 9% average EUR return after all costs and taxes — aggressive, but not absurdly so. You’ll end up with about €515,000. That’s serious money, but it’s a far cry from the YouTube dream of multi-millionaire status by 40. Why? Because the real magic isn’t in the index — it’s in your savings rate and consistency. The S&P 500 is just a tool, not a lottery ticket.
And what about “timing the dip”? Good luck. The S&P 500 had brutal EUR drawdowns: in 2008, a -37% collapse; in 2022, a double-digit drop. Most Euro investors panic and sell, turning a paper loss into a real one. The market doesn’t care about your emotions.
The Bottom Line
The S&P 500 is a strong long-term building block for Euro portfolios — but it’s not the fast lane to riches. Costs, taxes, and FX swings mean EUR returns are lower and riskier than the American dream suggests.
If you want a smarter approach, combine S&P 500 exposure with factor diversification, or look at dividend aristocrat strategies designed for real EUR income — see our guide to Factor ETFs and Dividend Aristocrats UCITS ETFs for practical ideas.
To Be Fair: Why the S&P 500 Still Beats European Laziness
Steelman time: For all its flaws, S&P 500 investing in Europe still trounces most “safe” alternatives. The MSCI Europe index (EUR, dividends reinvested) returned just 7.2% annualized over the last decade. Eurozone government bonds? A pitiful 1–2%. Italian real estate? Don’t make me laugh.
The S&P 500’s dominance is no accident. It’s a collection of global monsters: Apple, Microsoft, Nvidia, Amazon. These companies mint cash, drive global innovation, and are less exposed to European stagflation, overregulation, and demographic decline.
Despite the headaches, S&P 500 exposure is still the best “default” for Europeans allergic to their own continent’s market stagnation.
And let’s not ignore practicalities: UCITS S&P 500 ETFs are liquid, cheap, and accessible, with broad regulatory protection and daily trading. That’s a hell of a lot better than chasing the latest fintech scam or stuffing cash under your mattress.
The Real Pillars: Portfolio Construction Beats Index Worship
Here’s the uncomfortable truth: getting rich isn’t about picking the world’s hottest index. It’s about disciplined asset allocation, cost control, tax awareness, and periodic rebalancing. Overloading on the S&P 500 leaves you US-obsessed and under-diversified — a risky bet if the dollar tanks or the US hits a lost decade (remember Japan?).
That’s why sophisticated Euro investors diversify with global factor funds, quality European stocks, and non-equity assets. Rebalancing your ETF portfolio once or twice a year, as covered in our analysis of rebalancing frequency, matters more for long-term wealth than chasing yesterday’s US performance.
Prediction: S&P 500 EUR Returns Will Disappoint the Hype Merchants
So, will buying the S&P 500 make you rich in Europe? Only if you define “rich” as slow, steady compounding — not overnight stardom. The next decade won’t repeat the US tech-fuelled outperformance of the past. Currency headwinds, US market saturation, and rising EU taxes will grind down EUR returns. My prediction: the average S&P 500 EUR investor will see 7–8% annualized returns from here, not the double-digits of the last cycle. That’s still good — but not the “get rich quick” story you’re being sold.
If you want real financial freedom, stop worshipping the S&P 500. Use it as one pillar of a robust, diversified portfolio. Track your costs, understand your tax drag, and don’t let FX noise blind you to reality. The only guaranteed way to get rich? Out-save, out-discipline, and out-think the herd. The index is just a tool. You’re the architect.
Disclaimer: This article reflects the author's opinion and is for educational purposes only. It does not constitute financial advice. Always do your own research before making investment decisions.