I’m in a fortunate position right now where I have no bills and make about $50k a year at my job. On top of that, I’ve been earning about $100 a day trading stocks (mostly speculative plays). While this extra income isn’t guaranteed long-term, it’s been consistent so far. I’m 25 years old, have decent credit, and live with family who don’t expect me to move out anytime soon.
Right now, my main financial focus has been maxing out my Roth IRA. I’ve invested in Vanguard’s recommended ETFs (BND, BNDX, VTI, and VOO) and added SPY. After maxing my Roth IRA, I still have around $4-5k per month to invest or save. I also have some money in a high-yield savings account for emergencies and potential big purchases down the road.
I’m looking for advice on how to allocate the rest of my funds. Should I focus more on ETFs, individual stocks, or something else entirely? Any insights or suggestions would be greatly appreciated. Thanks!
You don’t need bonds at your age. Focus on growth. I’d stick with VOO and maybe add VXUS for international exposure. SPY is redundant with VOO since they track the same thing. Diversification is good, but not overcomplication.
Logan said: @Keaton
Got it. So I should focus mostly on VOO? I’ve also been considering adding VXUS for international exposure. Thanks for the advice!
Exactly. I’d recommend a split like 70% VOO, 20% VXUS, and maybe 10% in bonds later on as you approach retirement. For now, focus on stocks for growth.
You have a lot of options! Start by thinking about your goals:
If you’re planning to buy a house, start saving for a down payment in something safe like a high-yield savings account or CDs.
Consider investing in yourself through education or skill development. If you’re eligible for free programs or have family support, it’s a great time to explore that.
Look into other tax-advantaged accounts like a 401k or HSA if available. If not, a taxable brokerage account is a good next step.
For long-term investments, stick to simple and diversified funds like VOO, VXUS, and maybe a small percentage in bonds if you’re risk-averse. Rebalance periodically to maintain your desired allocation.
@Paden
Thanks for the advice! My current plan is to max out my Roth IRA, build up my savings, and put the rest into a mix of ETFs and individual stocks. I’ll probably simplify my holdings to VOO, VXUS, and maybe a bit of BND for stability. Any suggestions for individual stocks or additional strategies?
@Logan
That sounds like a solid plan. For individual stocks, stick to companies you believe in and understand. Otherwise, focusing on ETFs like VOO and VXUS is a great strategy for now. Good luck!
Parker said:
Why do you have both VOO and SPY? They’re almost identical.
You’re right—they’re very similar. I initially added SPY on a friend’s recommendation without realizing the overlap. I’m planning to simplify and stick with VOO going forward.
Focus on ETFs first. VOO and VXUS are great for diversification. If you want to explore individual stocks, consider MELI, IDXX, or ASML—they’re strong performers right now. For bonds, you can hold off until later in life. Good luck!