Should I go 100% Vanguard ETFs at 23 to secure my future?

I’m trying to figure out the best strategy for my investments. I work in healthcare and make about $8,000 per month in cash. Since I live with my parents, my expenses are basically nothing. I know I’m in a good position to grow my net worth fast. I can probably invest around $5,000 a month.

Should I take a high risk approach or keep it safe with ETFs?

How does 50% VTI / 50% SCHD (dividend ETF) sound to you?

You’re too young for dividends. Just use a total market index.

VTI and chill.

My advice would be to think about investing like having a healthy diet. Eating your vegetables is like investing in the S&P500. It’s totally fine to take on more risk, but first make sure you have the basics covered. A balanced diet includes low-risk safety funds, solid-return large market ETFs, and tax-sheltered growth.

Max out your 401k and put everything into an S&P500 fund. Look for the one with the lowest fees and that matches the S&P500 performance as closely as possible.

Next, build up a safety net of 6 months’ worth of expenses. If you’re still living with your parents, don’t worry about this step for now.

After that, here’s a plan for your personal investment fund: If you start with $15,000 in an S&P500 fund and add $200 a month, by the time you’re 65, you could have a million dollars, assuming an 8% return. This is separate from your 401k and your emergency fund.

Now that you’ve taken care of the basics, you can have some fun. You mentioned you wanted to invest in dividend ETFs, but honestly, the best way to build wealth is to focus on total returns and reduce your taxable income.

A dividend is a sign a company has cash flow, but it’s also a sign they’re just paying old board members instead of reinvesting in the business. If you really want to invest in dividend growth, look for companies that are growing their dividends, not just paying them out.

If you want to pick individual stocks, only do it if you’re okay with some risk. Stocks can have big swings, so you need to do your research and stick to companies you’re familiar with.

Good luck! Let’s get that money to work!

@Eli
Why not max out a Roth IRA first? If you’ve already met your employer match, wouldn’t the tax benefits be better for a new grad?

Go all in on Vanguard, secure that bag!

You can go high risk with ETFs.

Zaire said:
You can go high risk with ETFs.

Exactly. People think everyone should be in broad index funds and DCA, but if you’re young, can afford large downturns in a retirement account, and will be working for many years, you can get much better returns by going high-risk early. You can always switch to safer investments when you’re older.

If you had gone all in on tech in the 90s, it might have sounded crazy, but you’d be way ahead of the safe indexes now.

Do whatever you want. But set it to weekly auto. Don’t change unless you have a reason. Whether you go with VOO, QQQm, AVUV, or VUG, just set it to auto weekly and forget about it. Same thing with stocks. Want AAPL or TSLA? Fine, just set it to auto every Friday. Don’t overthink it. Start now, and let the auto do the work.

@Ode
I’m starting next week. $2500 per week.

Fallon said:
@Ode
I’m starting next week. $2500 per week.

That’s a lot of money. You clearing $300k already?

Fin said:

Fallon said:
@Ode
I’m starting next week. $2500 per week.

That’s a lot of money. You clearing $300k already?

Not sure who downvoted me, but I make $270k a year. I put in $2200 a week on my own. My wife helps too, so it might be closer to $2500. I’m aiming to get my first $100k invested by the end of 2025.

Check out this forum! They have great advice there. I would definitely suggest sticking with ETFs until you get the hang of things.

Cody said:
Check out this forum! They have great advice there. I would definitely suggest sticking with ETFs until you get the hang of things.

What do you mean, until you get the hang of it? Mutual funds rarely beat the market after three years. Are you beating the market yourself?

@Lian
I didn’t say anything about beating the market. All I meant was that you should understand the basics before jumping in. By the way, I am beating the market. Looks like you need to catch up on investing and reading.

@Cody
You’re doing better than 80% of mutual fund managers. That’s impressive.

You can split 50/50 into share price growth and dividend growth, like VTI and SCHD. As you keep investing, you’ll see how each fund behaves and decide which style suits you more.

You’re never too young for dividends, as long as they’re qualified and growing at a good rate. SCHD, DGRW, and DGRO are solid dividend ETFs to start with.

Good luck!

Step 1: Invest in yourself and your health.
Step 2: Learn the basics of investing and apply your knowledge.
Step 3: Pick companies whose products or services you use.
Step 4: Think long-term (decades) and globally.
Step 5: Be ready to take risks and learn from mistakes.
Step 6: Keep an eye on your money.

I would stick with ETFs until you have a strong enough cushion to feel comfortable putting some money into single stocks. If you do it the other way, you risk losses without the ability to tax-loss harvest.

Since you’re in healthcare, you should hold some stocks from your sector. I’ve held JNJ for years, and it’s done very well for me.