Rambling Mind

How to Invest Without Thinking About It

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Today we discuss a way for every single person to invest without even thinking about it. It is something that we can all start doing literally in the minutes that after we listen to this podcast. I think with all the information that is available to us, we can over complicate things because information can become a burden. We can get side tracked into a bunch of other things that distract us from the goal of investing which is simply to make money over a period of time. In this podcast, I break down exactly what every person should invest in to start saving towards that goal of retirement. The main way to do this is through something called a Target Date Index Fund. I break down how to invest in this Fund

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1. Target Date Index Fund

  • Simple way to find yours: Brokerage Name + Target Date Index Fund + Year (Birth Year + 60)
  • These are managed by a Fund Manager that adjusts the risk of the account as you grow older. More of your fund will move away from equities into bonds are you get older to protect you as you get towards retirement
  • Examples are: Fidelity Freedom Index Fund, Vanguard Target Date Fund, Schwab Target Date Index Fund
  • Make Sure Expense Ratio is below 0.2%
  • Turnover ratio no higher than 25%
  • Index Fund portfolio should have something similar to the following: Total Market Index Fund, Total Emerging/International Market Index Fund, Total Bond Index Fund (maybe cash).

    • 2. ETF variation of Target Date Index Fund

    • Basically instead of a Fund that is controlled by a Fund Manager, you will be in charge of everything that happens to the portfolio
    • Three main ETFs that you need to have in that portfolio: A Total Market ETF, An Emerging/International Market ETF, and a Total Bond ETF
    • For these ETFs ensure that the Expense Ratio is less than 0.1% for each ETF
    • Examples of ETFs to select using Vanguard:
    • VTSAX - Vanguard Total Marker ETF 
    • VXUS - Vanguard Total Emerging Market ETF
    • BND - Vanguard Total Bond ETF
      • ...more
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      Rambling MindBy Kelechi Iwuaba
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