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.
@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.
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.
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.
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.