Obsessing over the ‘perfect’ portfolio mix is a big mistake for getting rich — and Vanguard can prove it. Here’s the real wealth driver you ignore

Here are two factors highlighted in Vanguard's Principles for Investing Success (1) report that drive real wealth creation.

Savings rate is crucial (especially in the medium term)

Time is a key factor: How much you save is a crucial factor for wealth creation, especially if you're investing for near-term goals. After all, time in the market often beats timing the market — as the adage goes.

According to Vanguard's analysis, the savings rate heavily outweighs the impact of investment returns for short- and medium-term goals. For instance, your savings can account for as much as 94% of your progress toward any investment target set within a two-year time frame.

For the medium term, the impact of savings gradually diminishes. But even for longer, 30-year time frames, the savings rate can contribute as much as 51% of the overall progress. In other words, if you're a 30-year-old worker planning for retirement in 30 years, the majority of your progress will be determined by how much you manage to contribute to your savings.

So, if you're like many people and struggling to save, you can start by building savings habits into everyday spending. With Acorns, you can automatically invest spare change from your everyday purchases into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.

For instance, if you buy a donut for $3.25, Acorns will round up the purchase to $4 and invest the change in a smart investment portfolio. So that sweet treat automatically becomes a 75-cent investment in your future.

Over a year, these round-ups can add up, but if you want more, Acorns also offers monthly account contributions so you can supercharge your savings.

Even better, if you sign up today with a small recurring monthly deposit of $5, you can get a $20 bonus investment to get you started.

Discipline is the secret sauce

Vanguard's report highlights several factors that contribute to wealth building over time, including cost control, gradually increased contributions, portfolio mix and investment returns. However, all of these factors can be simultaneously disrupted with a single panic-driven move.

To illustrate this, the investment giant studied the performance of two hypothetical investors during the COVID-19 downturn in 2020. One investor remained committed to their investment strategy and portfolio allocations through the downturn, while the other moved entirely to cash at the bottom of the downturn, only to reenter when the market started to recover just a few months later.

The disciplined investor who sailed through the panic enjoyed a 21% total return, while the investor who flew to safety had a -2% return by the end of the year.

Simply put, panic selling is like interrupting the power of compounding at the worst possible moment.