In this video we are talking about Vanguard Index Funds, but more specifically we are talking about how we can use Vanguard Index Funds to become Financially Independent and Retire Early (FIRE).
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How to RETIRE EARLY with Vanguard Index Funds || FIRE
Early retirement is a dream for many individuals. The idea of being financially free and independent at a young age is certainly an appealing prospect. One effective method to achieve this goal is through investing in Vanguard index funds and adopting the concept of Financial Independence, Retire Early (FIRE). In this article, we will explore the steps you can take to retire early with Vanguard index funds.
1. Understand the FIRE Concept:
Financial Independence, Retire Early (FIRE) is a movement focused on achieving financial freedom and retiring at a relatively young age. It involves saving a significant portion of your income, reducing expenses, and investing wisely. The goal is to accumulate enough wealth to sustain your desired lifestyle without depending on employment income.
2. Set Clear Retirement Goals:
To retire early, you need to define your financial goals. Calculate the amount of money you will need to sustain your desired lifestyle during retirement. This will provide you with a target to work towards and help you determine how much you need to save and invest through Vanguard index funds.
3. Save Aggressively:
Achieving financial independence requires disciplined saving. Aim to save a high percentage of your income, ideally 50% or more. This might require some lifestyle adjustments and cutting unnecessary expenses. Create a budget and stick to it, ensuring that a significant portion of your income is allocated towards your retirement savings.
4. Create a Diversified Portfolio:
Vanguard index funds provide a reliable and low-cost investment option for FIRE enthusiasts. These funds track various market indices, providing diversification across different sectors and asset classes. Diversification is key to minimizing risk and maximizing returns over the long term. Vanguard offers a wide range of index funds, allowing you to create a portfolio that aligns with your investment objectives and risk tolerance.
5. Invest Consistently:
Consistency is key when investing for early retirement. Make it a habit to invest a portion of your income regularly, whether it’s monthly, quarterly, or annually. This approach, known as dollar-cost averaging, helps to mitigate the impact of market volatility on your investments.
6. Reinvest Dividends and Capital Gains:
One advantage of investing in Vanguard index funds is the ability to reinvest dividends and capital gains automatically. By doing so, you can compound your investment returns over time, accelerating wealth accumulation.
7. Stay the Course:
Market fluctuations are inevitable, and it’s important to resist the temptation to make impulsive investment decisions during downturns. Vanguard index funds are designed for long-term investing, and historical data shows that they provide competitive returns over extended periods. Stay focused on your long-term goals and avoid making emotionally driven investment choices.
8. Regularly Review and Adjust:
Periodically review your retirement goals and your investment portfolio. As you approach your target retirement age, consider adjusting your asset allocation to decrease risk and prioritize capital preservation.
Retiring early with Vanguard index funds requires discipline, consistency, and a long-term perspective. FIRE is not an overnight achievement, but by adopting these strategies, you can increase your chances of achieving financial independence and enjoying an early retirement. Start now and constantly educate yourself about personal finance and investment strategies to ensure a successful journey towards financial freedom.
Have you done a breakdown like this for fidelity?
I have seen so many videos and I get confused even more, I wanna start an investment
plan and I clearly do not know how to go about it. I have tried on my own before
but I need to know more. Any good advice/ideas will be great.
Bro, I love your videos, however there is one Vanguard ETF I never hear you discuss. I went back to a 1 year old video of yours (The 3 Vanguard Funds video) and still did not find this one Vanguard ETF in that video either. Do you have a problem with the VONG ETF? For one of the accounts I literally am only investing in that fund. Just would like your take on that ETF. Can you make a video? Sorry to ask.
I subscribed!
Very good
The real question is…will the American dollar have any worth to it upon retirement? All indications seem to show this rate of inflation and reprinting of money will continue indefinitely causing further devaluing of the dollar. Hopefully dividends etfs of GOLD and other precious metals ETFs will appreciate and increase in dividend payout
Is there any way you can do a video like this but investing in index funds like voo,qqq, and others then transferring into dividend funds like qyld sphd and so on once you reach a certain $$ cash value? Idk if I made sense
Great video!
Thank you for sharing.
Would love to see an excel that allows us to implement our own Dividend Portfolio with FIRE formula! Great work!
It seems like if you took that total amount in the ending balance and put it into an annuity, you would collect a higher monthly income, forever, without worrying about a market crash.
Thanks Joe as always and I'm going to as one of these etfs to put capital in when I can't find a stock I think
Friends I'm not telling you to resign from Your Job or abandon Your business, I'm telling you to create another source of income…..BE wise
How do you feel about Schwab ETFs?
Do we need bonds? Or just 100% vti?
What are your thoughts on an 80/20 stock/bond allocation? Many models show a higher ROI than a 100% stock allocation. As an investor with less than 10 years left to retire with 600k saved, 100% stocks (especially in this environment) seems dangerous. Also would appreciate content that delves deeper into asset allocation since that decision is truly makes or breaks a portfolio. Great info Joe.
Would these index funds just be held in a brokerage account? Not any sort of IRA?
Hi Joe – I love you content, your amazing and your my favorite!!!!!!!!!!! Best content on YouTube. My question is, if you were willing to do the same video with Fidelity ? If you do omg that would be a blessing. Thank you!
Can't go wrong with a combo of VTI and VXUS. I use them for my Traditional and Roth IRAs, and so far they've worked pretty well. With them, you get nearly the entire U.S. market and the large majority of the world market in a simple, easy-to-manage portfolio. Then with time, you can add BND to the mix and gradually make it a bigger slice until it's the biggest chunk of the portfolio by the time you retire.
I have securities valued at $1.5 M, and own a home valued at $300K. My annual expenses require $5000 a month cash flow . Can I retire based on FIRE calculations? I subscribed.
I SUBSCRIBED. Fantastic advice!!!
Great job, just a thought you could add inflation assumption.
What's missing in your projections is inflation. $5000/mo in 15-20 years will not be the same it is now. Either use real returns adjusted for inflation adjust the final nominal return numbers for inflation.
Index funds will be slaughtered on the way down!
New subscribers
Hi THANK YOU so much for this video! Is it possible to do the same with the FZROX fidelity fund?
VTSAX all day!
So helpful thank you ! I'm new to investing but want to set my future right!
You mentioned in the video of many Index funds but are they all 'Safe'
I currently making $60k a year and am investing 55% of my income into the total stock market index. I’m also getting a company match of 6%.
If you take these assets and put them in a covered call etf after you reach 1mil will that work? It would be 100k a year in dividends if you put it in qyld for example.
Can you make video like this with Fidelity and Schwab as well.
Great vid. Amazing spreadsheet.
More great content thanks for always putting together quality videos!
Excellent video. Keep them coming!
I SUBSCRIBED!!! – Joe, I've been investing in Vanguard ETFs for a few years now. I've been very happy with them, and I'm interested in your content. Thank you!
Can you do a fidelity video
Whats your thought on Portfolio 75% on SCHD, 5% VTI, 5%VYM, 5% VXUS, 5% VIG and 5% VGT?
Question – What ETF's or Stocks or ? Would you suggest if our Roth IRA & 401K is maxed out? What investments are more tax friendly in the taxable account?
Note I'm not eligible for an HSA .
Thanks so Much Joe!
Why ETF's and not mutual funds? The FIRE community focuses so much on VTSAX, but your spreadsheet dives into VTI. Amazing content as always!
I have about 50k in margin I could use to buy VTI in addition to the money that I already actually have. In your opinion good or bad idea? The cost to borrow the money is 9% annually. Thanks
Hello. Can you please write your email for communication?
im investing 1k in voo and 1k vti every month