Skyler said:
Living below your means is tough for a lot of people. Also, you’re using a pre-inflation number, so keep that in mind.
Good point! And thanks for the inflation reminder. It’s something I’ve seen influencers gloss over when talking about the S&P 500.
@Vey
Life changes, and your contributions might fluctuate too. If things get tight (or you end up with unexpected expenses), just keep what you can in the market. VOO is a solid choice, but adding some diversity can be good too.
Also, focus on maxing out Roth contributions early on if you can. It’s a huge advantage for retirement if your income grows, so don’t overlook it!
It’s not quite that simple… VOO only includes U.S. large-cap stocks. Based on modern portfolio theory, it’s better to diversify globally and across asset classes. Also, assuming a 9% return is a bit optimistic; 5-6% may be more realistic after adjusting for inflation.
In the end, remember that VOO’s growth isn’t “liquid” until you sell it—it’s not the same as a guaranteed yield.
@Ari
Appreciate the detailed response! And fair enough—investing at all has to be better than doing nothing, right? So, what else should I consider besides stocks? Bonds, CDs, high-yield savings?
Vey said:
@Ari
Appreciate the detailed response! And fair enough—investing at all has to be better than doing nothing, right? So, what else should I consider besides stocks? Bonds, CDs, high-yield savings?
Investing definitely beats not investing! For diversification, look at treasury bond ETFs like EDV or GOVZ—they work well with stocks. Bonds won’t beat stocks long-term, but they can help stabilize your portfolio in rough times.
@Ari
Thanks! Your input really helps.
And don’t forget, VOO doesn’t include mid-cap or international stocks. You might look into VT or VTWAX for broader global exposure.
People think they can “outsmart” the market, especially when they hear stories about someone turning $3k into a huge gain on a meme stock like Gamestop. Then they get burned.
Bela said:
People think they can “outsmart” the market, especially when they hear stories about someone turning $3k into a huge gain on a meme stock like Gamestop. Then they get burned.
I’ve heard the phrase ‘time IN the market beats timing the market,’ and it seems true.
Investing really is one of the easiest ways to build wealth, but it isn’t easy psychologically. Every year, something seems like a reason not to invest—Covid, inflation, wars. There’s also the temptation of “the next big thing,” like ARKK, which did amazingly in 2021 but left most investors down 70% after.
If you can stick to VOO long-term and ignore the hype, you’ll likely do better than 99% of people.
@Peyton
This is the approach I’m aiming for. I don’t need to get rich quick, just want steady growth for a comfortable retirement.
Vey said:
@Peyton
This is the approach I’m aiming for. I don’t need to get rich quick, just want steady growth for a comfortable retirement.
That’s the right mindset. But keep in mind, seeing stocks like Tesla or Nvidia soar can make you question sticking to VOO. A small ‘fun’ investment in individual stocks is okay if it helps curb the temptation, though.
@Peyton
Haha, ‘VOO and chill’ with a little side investment sounds good.
Vey said:
@Peyton
Haha, ‘VOO and chill’ with a little side investment sounds good.
Exactly! Just focus on growing your income too—earn more, invest more. It’ll do way more for your wealth than picking individual stocks.
@Peyton
By growing income, do you mean through my job? I also hear about building a dividend-focused portfolio.
Vey said:
@Peyton
By growing income, do you mean through my job? I also hear about building a dividend-focused portfolio.
Yes, anything that allows you to invest more into the market. Boring as it sounds, total market funds like VTI or VOO are long-term winners. Check out the Bogleheads forum if you want to see what’s worked for others.
Vey said:
@Peyton
Haha, ‘VOO and chill’ with a little side investment sounds good.
I do a 30/30/30/10 split: 30% VTI, 30% VOO, 30% QQQ, and 10% for other investments. It’s been working well, with good returns.
@Micah
Interesting! Do you think high-yield savings accounts (HYSA) fit into a strategy like this?
Vey said:
@Peyton
This is the approach I’m aiming for. I don’t need to get rich quick, just want steady growth for a comfortable retirement.
If you’re under 56, I wouldn’t focus too much on dividends yet. Growth is more important early on. Near retirement, you can shift to dividend-focused funds.
That’s the power of compounding.
Here’s what $3k plus $360/month over 30 years could look like. Calculator here.
If you bump your monthly contributions to $500, you’d get close to a million.