I’ve looked into dividends, crypto, stocks, and some other things but don’t know what would really be worth it for the amount of money I’m putting in.
@Jael
I second this. In the early stages you may only gain $100 a year off interest and think ‘That’s it?!’ But until you get to a sizable amount in an investment fund you will not see large return numbers. Remember the percentage of return is what really matters.
VOO + SCHD but more % in VOO. Maybe 70-30?
Kirin said:
VOO + SCHD but more % in VOO. Maybe 70-30?
Skip the VOO and its abysmal dividend yield and even worse dividend growth.
You’re after passive income, not retirement investments.
SCHD + JEPI/JEPQ + QDTE/RDTE/XDTE would turn into some serious income, quickly.
I own literally all of those and average about $1,500/month from them personally.
@Ridge
What amount do you have invested in those that nets you this income, if you don’t mind me asking?
Vesper said:
@Ridge
What amount do you have invested in those that nets you this income, if you don’t mind me asking?
Oh heavens. I don’t remember exactly but I would say it was probably about $200k-$215k to get started. I’m up on literally all of that so it’s worth substantially more now.
Yep stick to ETFs, and determine how much risk you want to take. You could do a 2x or 3x leverage ETF if you’re more comfortable with big lows and big highs. Many like TQQQ (3X Nasdaq) or SPXL (3X S&P). Yearly they’re up like 60-200%, but they can drop 10%+ in one day.
Otherwise just get VOO or QQQ, up 30%~. You could also get a world stock ETF like VT. If you want the least risky option with low but consistent gains, look into bonds like HYZD, up 11%.
Just put it into an S&P 500 index fund, like VOO.
Parker said:
Just put it into an S&P 500 index fund, like VOO.
That’s what I’m leaning towards. I already have an account open with Vanguard and have some money in VOO.
Parker said:
Just put it into an S&P 500 index fund, like VOO.
That’s what I’m leaning towards. I already have an account open with Vanguard and have some money in VOO.
Open an IRA or Roth IRA, that way it grows “tax free.” The other accounts tax your gains. And keep doing this and in time, I know it sounds like forever since you’re “young,” but it will grow to something impressive. Your unique advantage is time; lots of people in this sub don’t have that.
Getting started - Bogleheads has some great free resources to learn about investing. After a few hours reading the articles, and, especially, watching the Bogleheads Philosophy videos, most beginners can learn how to get better results than most professionals. Bogleheads is named after John Bogle, founder of Vanguard.
I retired at 57 years old. Investing doesn’t have to be complicated or costly to be successful; simple & inexpensive is most effective.
I invest 100% in total-market, index-based, low-cost mutual funds. Specifically, I use mostly Vanguard’s
Total Stock Market,
Total Bond Market,
Total International Stock Market, &
Total International Bond Market funds.
I’ve been investing this way for 35+ years. It’s effective, simple, & inexpensive.
My asset allocation (ratios of the funds mentioned) is based on my need, ability, & willingness to take risks. Market conditions are not a factor. Vanguard’s investor questionnaire (Investor questionnaire: Get personalized suggestions | Vanguard) helps me determine my asset allocation.
Buying individual stocks or sector funds creates unnecessary & uncompensated risk; I avoid doing so. Index funds are boring, but better for making money. If I wanted to talk about my interesting investments at parties or wanted a new hobby, I might invest 5-10% of my portfolio in individual stocks. As it is, I own pretty much every publicly-traded company in the world; that’s interesting enough for me.
All of the individual stocks & sector funds are being followed by thousands or millions of other investors. Current prices reflect their collective knowledge of future expectations for each one. I’m a member of the Triple Nine Society, but I’m not smarter than all of them. If I found a stock or sector that looked like a bargain, the most likely explanation would be that the others know something I don’t.
I prefer mutual funds, but ETFs could also work well. The differences are usually trivial for a long-term investor, especially if they’re the Vanguard funds I mentioned above. Actually, the Vanguard funds I mentioned above have both traditional mutual fund shares & ETF shares; they both represent a piece of the same fund.
The funds I use comprise Vanguard’s target date funds and LifeStrategy funds; these are excellent choices for many investors. Using the component funds allows some flexibility that can have tax benefits, but also creates the need for me to rebalance them periodically. Expense ratios are slightly higher than for the components, but are well worth it for many investors.
Other companies have funds similar to the ones I own that would work well. I prefer Vanguard because they’ve been the leader in this type of investing for decades & because Vanguard’s customers are also Vanguard’s owners.
I hope that helps! I’d be happy to help w/ further questions. Best wishes!
@AlenderMoney
Thank you for taking the time to explain everything.
Wynn said:
@AlenderMoney
Thank you for taking the time to explain everything.
You’re welcome!
Wynn said:
@AlenderMoney
Thank you for taking the time to explain everything.
Bogleheads will never help you with your passive income goals.
All they care about is growth investing and that’s it.
If you want to learn their methods of growth investing, they have their own subs.
@Ridge
Lots of Bogleheads are retired & enjoying receiving lots of passive income from our investments. I’m one of them.
AlenderMoney said:
@Ridge
Lots of Bogleheads are retired & enjoying receiving lots of passive income from our investments. I’m one of them.
Liquidation of assets doesn’t count as passive income, my man.
@Ridge
Yes, it does, especially if those assets are growing in value faster than they’re being sold. Total returns are what matters, not dividend yield, sonny boy.
AlenderMoney said:
@Ridge
Yes, it does, especially if those assets are growing in value faster than they’re being sold. Total returns are what matters, not dividend yield, sonny boy.
Hahahaha!!! Remember that when you run out of assets to liquidate and are forced back to work.
I’ll wave at you with my cup of coffee as you are on your way by.
Me and my silly passive income that allows me to stay home. 
@Ridge
As I’ve explained to you before, it’s very unlikely I’ll come anywhere close to running out of assets.
You, OTOH, may find that your income doesn’t keep up with inflation, forcing you to either cut back or sell assets you had expected to keep, which could lead to further cutbacks or depletion of your portfolio.
There have already been some great responses here about ETFs, so I’d just like to add my opinion about making sure you have an emergency fund. Most dividend yields end up being between 2 to 5% (average by sector, you can find a lot better and a lot worse) and a high yield savings amount can get you around 4% right now… And you’ll be able to access the funds easily whenever you finish college and get ready to move out.
Of course, if you already have money saved for moving/emergencies, disregard that. When I was focusing on dividends, I would Google something like “best dividend ETF” look around at the ones that sounded cool, then found a comparable version that Vanguard ran. I found that the ETFs that could afford to advertise had high fees, but there is usually a cheaper version.