If you have limited budget and want to diversify with what you have got to minimize the risk, I am going to introduce a great way how you can do so.
I literally invest in more than 9000 stocks with just $100 and that’s the power of ETF.
If you have heard of ETF but not sure what it is, let me take this opportunity to explain a bit:
ETF means Exchange Traded Fund and similar to other funds, it is a basket of securities.
And the unique feature of ETF is that it is traded publicly.
There is a ETF called VT (Vanguard Total World Stock Index Fund ETF).
(Disclosure: VT is one of the ETFs in my personal investment portfolio )
It covers both well-established and still-developing markets and is a great choice for beginners or long-term investors.
This ETF seeks to track the performance of a benchmark index that measures the investment return of global stocks. There are 9102 stocks included in this ETF.
10 largest holdings (14.70% of total net assets) as of 08/31/2021 are:
1 Apple Inc.
2 Microsoft Corp.
3 Alphabet Inc.
4 Amazon.com Inc.
5 Facebook Inc.
6 Tesla Inc.
7 Taiwan Semiconductor Manufacturing Co. Ltd.
8 NVIDIA Corp.
9 Berkshire Hathaway Inc.
10 JPMorgan Chase & Co.
Based on its current price $103, you only need to invest $103 to own 9102 stocks around the world!
If you invested $10,000 into this ETF, you only need to pay around $10 as fees! Because this ETF has a very low fee structure: 0.08%.
Compared to those actively managed funds that charges 2–3% as fees, you can save an estimated $250 and probably more per year!
That’s just 1 ETF, I’m sharing a lot more about the other great ETFs and the different kinds and how you can create your personalized investment portfolio to invest with confidence.
At age 30, I make a resolution to myself that I’m going to retire within 10 years (i.e. by age 40).
I started with reading a lot of the FIRE related books and blogs and information online about FIRE, but reading a lot doesn’t give you result. A doctor doesn’t become good at operation by reading books. What we need is an executable plan.
If you’re also looking to start your FIRE journey — meaning you want to retire early (with the option to work on whatever you want being financial independence), let me share my plan with you so that at least your have something to work on.
My plan is … passive investing
Why invest passively? Active investment requires at least 10 times the effort, experience, knowledge and time to learn, analyze, and keep track of news, changes in both internal and external factors, look at annual reports and statements etc.
Ask yourself honestly:
are you willing to spend all these hours and effort dedicated to learning investment? Are you good at maths and analysis and you want to get to know a thousand companies inside out to see whether to put your money? Can you dedicate to long term analyzing and tracking for 10 years? It would only take a few hours to learn how to invest passively compared to the thousands of hours over the years needed for active investment.
If you are lazy or busy just like me, and your goal is to FIRE, here’s the truth: you don’t need to be the next Warren Buffett to FIRE. You just need a modest return.
A modest return coupled with the power of compounding is all you need to get amazing return for your investment. It may not be obvious at first, but in the timeframe of 8–10 years the result can be mind-blowing.
I have a course on passive investing which just take you a few hours to learn and you will know which etfs to invest in and how to set up your investment portfolio and utilize it for FIRE purpose.
You can learn it in your own time and immediately get started with investing for FIRE right after.
