Make your investment!
Before we say anything else, here’s what you need to know about us. We are (mostly) passive investors. We buy index funds, ETFs, and mutual funds and hold long-term (think 20-40 years).
Why?
- Funds have built-in diversification. Instead of needing to research 🕵🏽, find the companies we were right about, and always be updating our portfolio, we can invest in a fund and be all Hakuna Matata about it.
- We look for funds with pretty low fees (~0.05% or less) so it’s a cheaper way to do less work. Compared to working with an advisor who will charge you 1%+.
- Seriously 0.05% vs. 1%+.
- It makes a BIG difference after you compound the money for 40 years.
- Funds tend to out-perform active investors & actively-managed funds anyways. Why pay them more to earn less? Warren Buffett bet $1M on it. tl;dr, he won.
If you are interested in active investing where you are really researching companies, doing fundamental analysis, and finding the moment you want to buy and sell, that’s great! But this isn’t the community to help you with that.
Now let’s get back to making your investment!
Shit’s about to get real exciting 👀
🎉 You’ve gotten your accounts set up
🎉 Your emergency fund is funded
🎉 You have a plan to pay off high-interest debt or you’re debt-free
🎉 You’ve figured out your Pay Yourself First number
You’re ready to invest in something!!
HOW DO YOU DECIDE? 😲
- What do you want to invest in? Whole market? Tech sector? Healthcare? All of them?
- Look at what the fund tracks. The whole stock market? S&P 500, NASDAQ, or Russell 1000? The tech sector? Etc…
- Check the expense ratio
- Plenty of great funds are 0.2% or below; most of ours are ~0.05%
- Look at historical performance
- This doesn’t guarantee how your investment will do. BUT, it does tell you whether the fund is a dud. I’m not about to invest in something that’s been losing money or performing lower than the market consistently.
- Fund allocation – i.e. what does the fund invest in?
- Is it mostly US? International? Mix?
- Which industries is it concentrated in?
- Top holdings
- Usually 30-40% of the fund will be concentrated in 10 stocks.
- Check to see what these are for the fund you’re interested in.
Want a post you can save? Here’s an IG post summarizing it all for you!
That’s it. Once you find a fund, or 3, 4…, you can invest and hold.
Resources to find funds:
- Here’s the list of Vanguard ETFs you can start researching with.
- Here’s the list of Vanguard Mutual Funds you can start researching with.
- Note: we like Vanguard, but you can find similar lists for Schwab, Fidelity, or others.
- Mutual fund vs. ETF
- Mutual funds: higher fees, usually have a minimum investment, but some brokerages, like Vanguard, allow you to automate your investment into them. Mutual fund prices are usually determined at the end of the trading day so you can only buy and sell then.
- ETFs: trade like a stock so you can buy and sell any time during trading. Usually lower fees, no minimum investments, but you can’t automate the investment.
- Below is a list of funds that we recently looked at for our own research if it helps you get started. These are not stock recommendations, but a summary of stocks we’ve recently been looking at & some of which we are invested in.
Stick around and in our next post we’ll show you how we automate all this.
You got this!
And if you have questions, you got us! DM us on @buildwealthlikeabadass or email us at buildwealthlikeabadass@gmail.com!
Cheers ✌🏽,
Build Wealth Like a Badass
This is meant to be educational content only and should not be taken as investment advice. Please invest at your own discretion and risk. Please contact licensed investment or tax professionals if you are seeking advice.
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