I have been watching a lot of ETF millionaires recently on YouTube. While I like their methods, I think there is room for this method along with some other ones to produce a truly diverse plan. But, let’s start at the beginning.
ETF stands for Electronic Traded Funds. They are a good way to diversify your investments, all wrapped into 1 package that trades on the stock market. A total stock market ETF basically takes hundreds of ob companies and packages them into 1 convenient package. One of the total market ETFs I invest in is VTI (Vanguard Total Stock Market Index Fund ETF Shares ).
ETFs, for the most part, do not grow fast. However, they grow consistently. If I would have invested $10,000 in Jun 2001, it would have been 180 shares. Today those shares would be worth $29,284. My money would have tripled PLUS it also pays dividends. Indeed, I would have earned $5,319 of dividends over the same time period.
The retirement is basically that. You mainly invest in total stock market ETFs. You reinvest all dividends. Your money grows at a good, pretty safe rate. You don’t have to pick individual stocks. Then, I only have one issue with this retirement method. The plan calls for you to cash out some of your stock monthly during retirement. Yes, they want you to draw down the principal in order to live throughout retirement. I prefer to live off of the dividends.
So, other than that, I truly like this method. I will use this method for 40-50% of my stock market retirement plan. I will also use bonds, real estate, and dividend portfolio to truly flesh out my retirement plan.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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