What do you think of my strategy for long term investing? Looking for tips and advice…

I’m in my early 20s and I decided to start investing for the future. I’ve got a budget of $50 a month to put into investments and I’m considering how to split it. Here are my ideas:

#1: $30 into the S&P 500, $10 into gold, $10 into crypto (split evenly between Ethereum and Bitcoin)
#2: $40 into the S&P 500, $10 into gold
#3: All $50 into the S&P 500

I’m leaning towards option #2 because I think it’s smart to have a cash reserve of gold that I can use if there’s a market dip. It could help me buy more S&P 500 if the market drops.

Please let me know if there’s anything I should fix in my plan. The goal is to make the most money over a very long period with no risk at all.

20 years with no risk tolerance won’t get you far. You’re going to miss out on growth both in your investments and life.

Phoenix said:
20 years with no risk tolerance won’t get you far. You’re going to miss out on growth both in your investments and life.

Gold seems risky to me… is that really safe?

@Adair
Gold is just a safe cash reserve for inflation. I plan to sell it if there’s a good buying opportunity on the market, especially if there’s a dip in the S&P 500.

Phoenix said:
20 years with no risk tolerance won’t get you far. You’re going to miss out on growth both in your investments and life.

This is all about long-term investing. I’m a remodeler and flip houses. I don’t need risk with money that’s just sitting there.

@Niko
Time is your best way to eliminate risk in the market.

Phoenix said:
@Niko
Time is your best way to eliminate risk in the market.

What would you suggest I do instead then?

Niko said:

Phoenix said:
@Niko
Time is your best way to eliminate risk in the market.

What would you suggest I do instead then?

100% VT or 100% SPY

You need to accept more risk. You have four decades to invest. I wouldn’t put anything in gold or crypto. Just go with VTI until you hit $10k invested.

Cameron said:
You need to accept more risk. You have four decades to invest. I wouldn’t put anything in gold or crypto. Just go with VTI until you hit $10k invested.

What would you suggest once I have $10k in VTI?

@Niko
Then you could invest another $90k in VOO or VTI.

@Niko
You could split it between VTI, VUG, and VYM for a simple 3 fund portfolio.

Cameron said:
You need to accept more risk. You have four decades to invest. I wouldn’t put anything in gold or crypto. Just go with VTI until you hit $10k invested.

Can you explain what VTI is? I’m not a native English speaker. Thanks!

@Morgan
VTI is a fund that invests in the entire U.S. stock market. The S&P 500 is an index of 500 U.S. stocks. You can buy funds that track the S&P 500 like VOO.

@Morgan
VTI is the Vanguard Total Stock Market ETF.

If you have zero tolerance for risk, why are you even considering crypto or 100% stocks? That seems like the opposite of what you’re aiming for.

Noor said:
If you have zero tolerance for risk, why are you even considering crypto or 100% stocks? That seems like the opposite of what you’re aiming for.

The S&P 500 has been growing for a very long time. I see Bitcoin as a potential new ‘gold standard’—although I know it could fall apart. The whole economy could fall apart, too, and then what’s money worth?

@Niko
But crypto and stocks still carry risks, even if you’re using them as a hedge. You said you have no tolerance for risk. So why consider high-risk assets like crypto or a full stock portfolio?

Noor said:
@Niko
But crypto and stocks still carry risks, even if you’re using them as a hedge. You said you have no tolerance for risk. So why consider high-risk assets like crypto or a full stock portfolio?

So, what would be a better option for someone with zero tolerance for risk, but still wants diversification?

@Niko
Short-term treasury ETFs are the safest. But assuming your ‘zero tolerance for risk’ is a bit exaggerated, I’d suggest heavy bonds with a globally diversified stock portfolio. Vanguard LifeStrategy funds are a good, simple option. For tax-advantaged accounts, a target date fund (TDF) could work. For example, 20/80 or 40/60 stock to bond ratios would suit someone with a lower risk tolerance.