Investing is getting money working for you so you can stop thinking about money. For a steward, investments are what convert years of margin-building into options: options for your time, your work, what you can give away, and who you can be present for. This post is about picking the simplest path in so you can get back to your life.

Opening your first investment account feels like walking into a grocery store with 15 brands of peanut butter when you just need one jar. The options are paralyzing so let me save you some anxiety: there is no perfect investment, rather it’s just about picking something simple you can stick with while still being able to sleep at night. You can go down infinite rabbit holes when deciding what to invest in; this post is merely an attempt to simplify the overwhelming options into a few concrete choices.

FOMO

Every single year, there will be stocks or assets that outperform your portfolio. You’ll see how Nvidia shot up, Bitcoin used to be a nickel, and someone will brag about some random stock they hit the lottery on.

Winners seem so obvious in hindsight, but you have to let go of this infinite chasing of past performance. If you can just get average returns over a long period of time, you’ll do better than almost all professional investors. The trick is getting started and then keeping investments in the market when everyone else is panicking (this is extremely hard but important).

Asset allocation

Think of this like an investment recipe - assets are the raw ingredients and asset allocation is how you proportion them into a mixture. It’s deciding what percentage of your money goes into stocks vs bonds, US vs international, or whether you’re going to try picking individual companies or just buying a little bit of everything.

I’m a big fan of the JL Collins approach from The Simple Path to Wealth: regularly buy the same single simple diversified fund, then go spend your time doing more interesting things!

Let me give you a few options depending on what level of “I never want to think about this again” you’re aiming for.

Option 1: Target Date Funds

These are best for people who truly never want to log in or think about rebalancing. Target date funds are like a crockpot in that you set it, walk away, and it does everything for you. These funds automatically shift from aggressive (more stocks) to conservative (more bonds) as you get closer to the target date.

If you’re young and want to be more aggressive, pick a date further out than when you may need the money. The fund handles all the rebalancing behind the scenes using index funds, so you’re still getting low costs.

The downside is you pay a slightly higher cost (expense ratio) for the convenience. But it’s still way cheaper than a money manager and perfect if you want to automate contributions and forget about it.

Option 2: VT

VT is the actual ticker of an index fund that gives you exposure to the entire world stock market (almost 10,000 publicly traded companies across the globe). You don’t have to guess if the US or International market will do better in the future, VT handles the weighting between the two and automatically rebalances through time. With VT you ride the waves of the entire global economy.

Option 3: VTI + VXUS

These two tickers effectively split VT into two components: US and International.

Why split instead of just using VT? Sometimes certain accounts (like your 401k) don’t offer VT, so you need to recreate it manually with VTI and VXUS. That’s the main reason I split mine.

VTI is the total US stock market. You get the S&P 500 plus small cap companies. Everything from Apple and Amazon to tiny companies that might grow into the next Amazon.

VXUS is everything else. The total international stock market outside the US - companies like Toyota, Samsung, etc.

Together, VTI + VXUS gives you basically the same exposure as VT, but with a slightly lower expense ratio and the ability to choose your own weighting.

Some people go 100% US. Some go 80/20 US to international. Some go 60/40. I personally do 60/40 because that roughly tracks the total world market weighting (what VT does automatically). There’s no “correct” answer here. Pick something you can stick with.

The index fund advantage

All of these options are index funds, which means you’re not trying to pick the winners. You’re buying the whole haystack instead of searching for needles. Index funds give you:

• Massive diversification (exposure to thousands of companies)
• Extremely low costs (expense ratios under 0.10% typically)
• No need to constantly monitor or rebalance
• Returns that beat most professional money managers over time

You’re basically betting that the global economy will create real value over a long period of time, that companies will continue to innovate, compete, and grow. I don’t think I’m smart enough to pick which specific companies will win, but I’m confident that the system as a whole will keep chugging along, albeit with lots of short term bumps and surprises.

Do you need bonds?

Short answer: probably not yet if you’re young and a long time away from needing the money.

Bonds are the boring, stable part of a portfolio. They don’t grow much, but they don’t crash much either. If you have 30+ years until retirement, you have time to weather market crashes. Stocks will be volatile in the short term, but over long periods they have way more horsepower for growth than bonds.

I don’t hold any bonds right now because I’m young and have a 30 year time horizon. As I get closer to actually needing the money, I’ll start adding bonds to smooth out the ride.

Target date funds do this automatically, which is why they’re great for people who don’t want to think about it.

Rebalancing

If you pick VT or a target date fund, rebalancing happens automatically.

If you split into VTI + VXUS or pick specific allocations, you’ll need to rebalance once a year or so. This means selling the thing that went up and buying the thing that went down to get back to your target percentages.

This is how you maintain your strategy and avoid accidentally becoming 95% US stocks because the US had a great decade.

The only way to know if your 60/40 split is “right” is to stick with it for a long time. If you change your mind every year and chase whatever performed better, you’re chasing winners rather than sticking to a strategy.

Mutual Funds vs ETFs

ETFs (tickers like VTI, VXUS, and VT) trade throughout the day like stocks. You can buy them through any brokerage with no transaction fees, just the tiny expense ratio. You can now buy partial shares of ETFs, meaning you can put an exact dollar amount in instead of having to buy whole shares at a time.

Mutual funds (tickers like VTSAX, VTIAX, and VTWAX) are basically the same investments under the hood as their respective ETFs, but they only trade/execute at the end of the day and let you set up automatic investments more easily. Be careful here, if you try to buy a Vanguard mutual fund through Fidelity, you might get hit with transaction fees (whereas buying Vanguard ETFs through Fidelity will not have extra fees).

My approach:
• Use Vanguard mutual funds in my Vanguard accounts for automatic investing
• Use Vanguard ETFs everywhere else (Fidelity, etc.)
• Keep ETFs in my taxable brokerage account because they’re slightly more tax efficient
• Keep bonds (if any) in tax advantaged accounts (IRA, 401k, HSA)

The differences are small enough that you shouldn’t stress about it. Pick whichever is free in your brokerage.

The 90/10 rule for gamblers

I know all the logic behind buy and hold, know index funds work, and I know timing the market is a fool’s errand.

Yet I still want to tinker.

So I give myself permission to play with 10% of my portfolio. It may be crypto, individual stocks, emerging markets, whatever scratches the itch of trying to beat the market. The other 90% stays in boring, proven, long-term index funds.

This is probably a bad decision. But it’s a bad decision with only 10% of my money, an amount I could lose completely without wrecking my financial future. And honestly, it keeps me from doing something stupid with the other 90%.

If you can’t resist the urge to gamble, do it with a small percentage that won’t destroy you if you’re wrong.

My personal setup

I’m 100% stock index funds right now because I’m young and have 30+ years until I need this money. I split between VTI and VXUS at roughly 60/40 to match global market weighting.

Some of my accounts don’t offer VT, so I recreate it manually across my entire portfolio.

Will there be investments that outperform my portfolio over the next 30 years? Absolutely, and I am okay with that because I’m not trying to pick winners. I’m trying to capture the growth of the entire global economy without losing sleep or spending hours researching stocks.

Just Start

The difference between starting with VT vs VTI+VXUS vs a target date fund vs some other strategy is so small compared to the difference between starting now and waiting another year because you’re paralyzed by options.

Pick something simple that you can stick with, something that helps you sleep at night. Then set up automatic contributions and leave it alone.

The market will go up and down, you’ll read news about crashes and booms and the next hot stock. Just ignore it, hold on, and keep contributing.

If you can pick something simple and stick with it, you’ll outperform most professional money managers — and free up the mental space for your people, your work, and the things money was never supposed to be chasing in the first place.