The 1 investment portfolio

In order to retire you need cash flow. Aka income.

The most important thing you can do to reach retirement is to earn more money. That is why most people in America really so heavily on Social Security. Because it is guaranteed income from the government.

If you saved $1,000,000 and then spent 40,000 each year that 1mil would last you 25 years.

In order to save 1,000,000 without any investments you need to save 33,333 for 30 years.

I am 32 and I never saved 33,000 in one year. I would never be able to retire at my current rate.

Luckily money compounds like magic. We get a return for investing our money.

I have more than 1 investment in portfolio. I actually have all kinds of investments in my portfolio. Not really out of choice. I have a 401k through my employers and I have only a select few number of investment options to choose from. So I have invested in their version of S&P500 index fund.

My investment vehicles include the following:

  • 401k
  • HSA
  • ROTH IRA
  • Stock Brokerage Acct
  • Real Estate

And then I have a bank account for cash. There are plenty of reasons that those investment accounts are good to have. They each have a different function and advantages/disadvantages. It basically boils down to taxes.

The one that I care about the most is my stock account. Spoiler: You have to pay taxes on a stock account and that will impact your future gains. Basically through paying taxes on dividends and if you ever sold you stock, but I do not really plan to sell the stocks that I purchase. I like addition, not subtraction.

All you need to invest in is VTI.

VTI – Vanguard Total Stock Market ETF

It does not even matter what the price of it is. You can buy in through fractional shares, basically a certain dollar amount.

You are betting that in 50 years the US economy and therefore the global economy will be bigger than it is today.

But Collin, don’t I want to ‘beat’ the market. I do not where this idea of ‘beating’ the market came from. It baffles me. Maybe it is an evolution thing. Like somehow humans are programmed to ‘beat’ one another. To measure ourselves against each other and we get self value from outperforming other people. As if we are happier human beings because we did better than someone else. Some of the most successful people are also the most unhappy people. Because they are slaving their life away at a desk. Damn, I know that feeling all too well.

But forget what the world tells you. The market works for you. It needs you. More investors equals more growth. Companies need money to grow.

I just read in the paper today that American Airlines is going to raise $3.5Billion worth of new money on top of the money the received from the federal government aka American taxpayers to continue its operations. That is also on top of the money they have already raised from investors in the market. And that is after they have already gone bankrupt. Once maybe twice I am not sure with their history.

Never ever rely on one business for your retirement. Unless you are the founder of that business or inherit the business from family. One business can easily go away. It is much more difficult for 100 business to go away. For the majority of businesses the government does not care if one business fails. It cares if an industry fails i.e. banks, autos, airlines. If the entire economy is threatened: COVID. The government will bail it out.

The market can go through decades where it is slugglish, but it always increases in the long term. Politicians live and die with the economy. Jobs is always one of the top issues for voters. So politicians will always enact policy in favor of boosting the economy. Who wins? Stocks. Because companies get government funding to carry out laws. The government hires people and pays into their 401k which is invested in the overall economy.

401ks, pension funds, 403Bs, IRAs

They are all consistently investing into the market. They are constantly pumping money into the economy.

So you could invest all of your money in VTI in a stock account and retire off the dividends one day or slowly withdraw from the total balance in retirement.

But you want more. We all do.

If you want a little bit more growth than the entire stock market throw in VGT – Vanguard Information Technology ETF. All the tech stocks in the market. My bet is that technology is going to increase in the next 50 years and the revenue of those businesses will increase faster than the overall market. So you do 70%VTI and 30%VGT.

And some of those companies in both of those funds will overlap.

Maybe you are getting close to retirement and you do not want as much risk.
BND – Vanguard Total Bond Market Index Fund

Low volatility, monthly payments.

But if put enough money into VTI you won’t need the bonds.

Do the 1 investment portfolio and then focus on building up your income.

Cash flow is king. It will make you rich.

Published by Collin Harness

Obsessed with creating value and helping people achieve financial independence.

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