I’m a Millennial Investor: Here Are 3 Funds That Built Wealth for Me
Written by
Laura Beck
Edited by
Gary Dudak
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Are you a millennial looking to start investing and building long-term wealth? With so many different investment options out there, it can seem overwhelming to pick the right one. That’s why the easiest way for millennials to start investing is with low-cost index funds or mutual funds. These allow you to invest in a diverse mix of stocks, bonds and other assets all at once, rather than trying to pick individual investments.
“My wife and I became millionaires at age 33 by consistently investing money from our paychecks into simple index funds,” said Steven Keys, co-founder of Trip of a Lifestyle.
Starting to invest while you’re young lets you take advantage of compound growth, which can significantly boost your wealth over time. Don’t let the perceived complexity of investing scare you off from getting started. Even small investments made in your 20s and 30s can grow a surprising amount by the time you retire.
“Most of our money is invested in three Vanguard ETFs: VTI, VXUS, and BND,” said Keys. “All three of the funds we hold are ETFs offered by Vanguard, but it’s worth noting that the exact same products are offered as both ETFs and traditional mutual funds by many different investment companies. As long as the fees are low and they’re tracking the same indexes, they’ll deliver nearly identical returns.”
Here’s a breakdown of the three funds that built wealth for Keys.
Vanguard Total Stock Market ETF (VTI)
Current share price: $263.35
The Vanguard Total Stock Market ETF offers a simple way to invest in the entire U.S. stock market. It includes a wide range of stocks from large, well-known companies to smaller, up-and-coming businesses. This means when you invest in VTI, you’re spreading your money across thousands of different companies, reducing the risk of losing money if one company doesn’t do well.
“VTI is a total stock market index fund, which makes diversification easy by containing nearly every publicly traded US stock under one ticker symbol,” said Keys. “VTI automatically delivers the average return of the US stock market, effortlessly, with extremely low fees.”
One of the great things about VTI is its low cost. You won’t pay much in fees, so more of your money stays invested and working for you. Plus, it’s easy to buy and sell shares, so you can invest or cash out whenever you need to. VTI is a smart choice if you want a hassle-free way to grow your money over the long term by tapping into the overall growth of the U.S. stock market.
Vanguard Total International Stock ETF (VXUS)
Current share price: $61.83
To complement your U.S. stock holdings, Keys recommended adding the Vanguard Total International Stock ETF (VXUS), which lets you invest in companies all around the world. This fund includes thousands of stocks from markets across the global economy. This way, you’re benefiting from growth in other parts of the world, not just the U.S.
“VXUS is a total international stock market index fund, which does the same thing as VTI for the stocks of non-U.S. companies,” said Keys.
According to him, VXUS is affordable and easy to trade, making it a great option for diversifying your investments. With VXUS, you can add an international flavor to your investment mix.
Vanguard Total Bond Market ETF (BND)
Current share price: $72.31
The Vanguard Total Bond Market ETF (BND) is a nice safety net to have in your investment portfolio. It invests in a variety of bonds, including government, corporate, and mortgage-backed securities. This mix helps to give you a steady income with less risk compared to stocks. BND is designed for people who want a reliable and predictable return on their investments.
“Even in a diversified index fund, stocks are still volatile assets,” said Keys. “To add stability to our portfolio, we hold BND, which is a safer total US bond market index fund.”
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