Stock & Bond Investing in Your 20s

Your 20s can be magical if you have the time, patience, and attentiveness to learn about finances. However, most of the time, we are fighting off our hormones.

For this series, I assume that you want to start a family and build generational wealth throughout your life. If you want to stay single, you can pretty much do whatever you want and get decent results.

The most challenging part of your 20s is staying out of debt. If you can keep your debt levels under control, you have a great shot at building massive wealth. Here are some articles I write about your 20s.

1. Retirement Planning in Your 20s (Amazon)
2. Real Estate Investing in Your 20s (pdf)
3. Staying Debt-Free in Your 20s (pdf)
4. Dividend Investing in Your 20s (Amazon)
5. Bond Investing in Your 20s (pdf)

The 60/40 is back. The 60/40 rule was the investing method of choice twenty to thirty years ago. In the rule, you would allocate 60% of your portfolio to stocks and 40% to bonds.

Start a Sports League toward Passive Income

The 60/40 rule disappeared over the last fifteen years because bond yields have been abysmal. However, bonds are starting to produce decent yields, which can be a significant part of your strategy.

Researchers designed the 60/40 rule as a way to liquidate your nest egg during retirement. The idea is to work up a big pile of money over 30-40 years, then withdraw it using the 4% rule.

You should use the bonds to create immediate income throughout retirement and withdraw stocks to cover anything bonds could not.

I want income today! I am different; I want income today. We will dedicate a small portion of our portfolio to dividend growth, bond growth, and index funds; however, we mainly want to create an income-investing portfolio.

5 Takeaways from “Business for Authors”

We live our lives on cash flow. When we retire, we still need income. In fact, each year, we become responsible for more people and things. Therefore, we need ALWAYS to grow our cash flow.

My coming retirement. For example, I retire from the Marine Corps in six months after 24 years of service. 

My pension should be between $7,000 and $8,000 per month. My family can live on $5,500 per month in Pensacola, Florida.

Additionally, my dividend portfolio pays me $1,300 to $1,500 per month. I mostly reinvest this revenue; however, I can access most of these dividends (some are in my Roth IRA).

Trust me; it feels good to have this additional income as a backup to challenges in life. In fact, I wish I had this dividend income BEFORE I obtained a family.

The Magic of a Sales Funnel

Income portfolio before a family. Your goal in your 20s is to create an income portfolio of $1,000 monthly before starting a family. 

Creating this portfolio does three things for you: it ensures you understand finances and gives you options and confidence.

I started my family at age 25, while my wife was 22. We had our first child through the first year of marriage. I started with $60,000 in savings.

Income Investing vs. Index Funds

After buying a house two years later, I began to accumulate debt. I soon had to take a loan against my 401K account. I stayed in debt for almost 11 years until I learned how to free myself and my family. 

Now I am 42 and sitting pretty. If I had started my marriage with $1,000 per month in income, it would have changed my life.

Allocations. I would love to keep reminiscing, but we must start investing. Here is how I would structure my portfolio throughout my 20s, focusing heavily on income.

1. Bonds- total of 10% (series “I” bonds, 30-Year bonds over 5%)
2. Index Funds- total 5% (any of the four index funds)
3. Dividend growth- total 10% (DGI stocks or Dividend ETFs)
4. Income Investing- total 75% (Focus on BDCs and High Yield Blue Chips)

I love bonds, but we need income early in life. We don’t know if our spouse will work or how many kids we will have—we must prepare for anything.

Start a Tutoring Business toward Passive Income

The power of income. Creating a $1,000 income stream will increase your revenue annually. 

Even if you cannot add to your income early in marriage, you can still reinvest some of your revenue. Your dividends will keep growing until you can retire from this stream alone.

I recommend focusing on business development companies like Ares Capital (ARCC) and Owl Rock (ORCC) because their stock price and dividends will continue to grow.

You can also purchase high-yield blue-chip stocks like Pfizer (PFE), Altria (MO), Philip Morris (PM), and Medical Property (MPW).

Advertising vs. Content Marketing

You should also add some high-growth dividend stocks like Visa (V), Mastercard (MA), Costco (COST), Microsoft (MFST), and T. Rowe (TROW). These stocks don’t pay the highest dividends, but the dividend growth is impressive. 

You can allocate 5% of your portfolio to the primary index funds (QQQ, DIA, SPY, VTI). This section will ensure your money grows along with the American economy and stock market.

Finally, Series “I” Bonds are an excellent investment at any age. Investing $100 monthly can help you in an emergency. 

Should You Trade on Margin?

If 30-year bonds cross 5%, buy them directly from the US Treasury at TreasuryDirect. If they stay under 5%, a bond fund (BLV) or PIMCO closed-end fund (PDO) can give you a nice monthly payout.

Conclusion. I cannot stress how essential income is to your life moving forward. The mainstream press will tell you to store your money in a 401K at a young age.

While I agree (to some extent), just be extremely careful. It’s not fun to need $10,000 and have it locked away in a 401K. I lived that life, and I don’t recommend it.

If you had a $1,000 per month income stream, you could take a loan for $10,000. Then, use your dividends to help pay off the loan in less than one year.

The Sharing Economy vs. Inflation

If you build your income portfolio in a brokerage like M1 Finance (affiliate), you can borrow directly against your stockpile (at a lower interest rate). Therefore, you build a line of credit as you build your portfolio.

That is the power of consistent, steady dividend income. I am living life as an income investor, and it is the best way to survive the unknown.

Every month I have $1,300 to $1,500, which I can use if needed. If not, I will reinvest and make the pot bigger for the next month. 

Starting and running a family is challenging. There are only two types of issues in a marriage, emotional and financial. Money can solve almost all of your problems outside of emotions. Build an income portfolio young and reap the benefits of a great life. Good Luck!

1. PDF of the Month: Don’t Gamble with Retirement 10 (Free 419-Page PDF)
2. Free PDF Downloads: Download FREE PDF LIST here
3. Financial Mindset: Become CEO of Yourself 2 (Free 196-Page PDF)
4. Retirement Planning: Your Retirement Planning Guide 2 (Free 255-Page PDF)
5. Investing: How We Plan to Retire on Dividends 4 (Free 139-Page PDF)
6. Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
7. Real Estate: Financial Independence through Real Estate 4 (Free 112-Page PDF)
8. Business: Retire Rich, Retire Comfortable with a Business 4 (Free 149-Page PDF)
9. Latest DGWR: Don’t Gamble with Retirement 10 (Free 419-Page PDF)
10. Everything!: The Biggest Book on Passive Income Ever 3! (book)(Web Edition)(Art Edition)
11. Writer’s Comparison: M1 Macbook Air vs. GalaxyBook3 Pro 360
12. Read My Books for Free: Free Kindle Books Schedule
13. Book Design: Design Tips on YouTube
14. Kindle Unlimited: Why I Finally Subscribed Kindle Unlimited (learn more)
15. Book Reviews: 505 Takeaways from 101 Books (pdf)
16. Writing: The Publishing Chronicles (Part 1, Part 2, Part 3, Part 4, Part 5)
17. Best REIT- Fundrise: Fundrise vs. US Treasuries (Join Fundrise)
18. Follow us: On our Facebook Page and Join our Facebook Group
19. Support the Channel on Cash App: $Kingmarine1981
20. For more detailed analysis, join my Youtube: MFI YouTube Channel

Monthly Dividend Tracker Template: Buy on Etsy

Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. 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. All Right Reserved Military Family Investing