Matt the Money Guy

This is a slight oversimplification... but not by much.

Within stock and bond investing, this is as diversified as you can get, point blank. Within these 3-funds you basically own the entire world.

There is a common misconception that buying more funds will diversify you more, but it's not the case because you have to look at the actual underlying investments of the funds. For example, buying VOO (the S&P500 ETF) would not diversify this portfolio because you already own all of the S&P500 in the total US stock market index. In fact it would do the opposite of diversify, it would concentrate your portfolio further.

I've given the Vanguard example here, but basically every major brokerage firm has equivalent funds that you can make a "classic" 3-fund portfolio out of. One more pro-tip is that you can also buy all three of these funds in a single fund by buying a target date index fund. All of this is to say, it's not actually about the number of funds you buy, but the underlying investments.

This post didn't mention weighting, but a common rule of thumb for you is 120 minus your age should be your bond weighting, and the rest can be split 60-40 between US and international stocks. You don't really need to start this until your 50s or 60s. But there are different schools of thoughts on that, so I won't go into it too deep here!

- Matt

P.S. I'm a HUGE index fund guy, so I made a free index fund guide explaining them and laying out options to create an index fund portfolio at different brokers (Vanguard, Fidelity, Schwab, etc). Comment "guide" and I'll send you a link to get the PDF!

This post is a big deal for me... I'm sharing with you how I kill time when I'm bored at work 😂

In all seriousness, don't spend all your free time doing this, but you should have some sense of how much your investments will yield you in the future. There are a million websites to do this at, I just use calculator.net because it pops up first when you google "investment calculator".

I think this is useful because it helps you to conceptualize how much changes in investment horizon and contributions can change your outcomes. These scenarios will never be 100% accurate because you never know exactly how much you will invest or exactly what the stock market return will be, but you can certainly establish a range of outcomes.

Investing is a LONG term activity if you want to do it well, so it's easy to get discouraged in the short term while you're in the "build" phase of your journey.

Test some scenarios and get excited by the fact that you're setting yourself up for the future!

- Matt

P.S. I use SoFi for my high-yield savings accound and they are running a sign-up bonus where you can get up to a $400 with opening a new account and connecting direct deposit. Comment "HYSA" and I'll send you a link to get your bonus!

You all loved the 10-year annual returns, so figured I’d go back and do the 20 year as well!

There were a LOT of misinterpretations for the 10-year returns graph, and I’m sure there will be for this as well, so let me be VERY clear: each bar you see on the graph is the compound annual growth rate (CAGR) for the PREVIOUS 20 years. So the 2025 bar indicates that your average annual return from 2005 - 2025 is 10.9%.

I always try to find different ways to show this point: If you invest for the long term, you don’t need to worry about the day-to-day or even year-to-year fluctuations. Just keep investing - it really is the best strategy.

Investing can be scary for the short term, but when you zoom out (like you see here), it’s one of the best decisions you can ever make for the long term.

- Matt

Retirement is a NUMBER not an AGE!

That's why this nifty rule called the "4% rule" was created. It is based on a financial study called The Trinity Study that looked at historical equity returns, as well as the sequence of those returns (I know, interesting stuff....) to determine how much your "safe withdraw rate" could be.

The short summary is that by withdrawing 4% of your starting portfolio value at retirement, and adjusting for inflation (e.g., $60k in year 1, $60k + inflation in year 2), you can live off of this for the length of a standard retirement. If you wanted to retire earlier, you would have to lower that rate to account for the additional uncertainty of a longer time period.

Some of you may be thinking "if index funds are returning 10%, why can't I withdraw 10%?" Well, the answer is in the sequence of returns. There WILL be years where indexes tank (think of COVID or 2008), and as a retiree, you will still need to withdraw your money to live. Withdrawing that $60k+ in down years will draw down a much larger portion of your funds than in up years, so you need to have a conservative percentage to account for those years.

Of course this is a simplified rule and it will also depend on government benefits, what assets you own, and many other factors. But it's not a bad starting point to figure out your "retirement number"!

Want to figure out how your number compares to Jessica's? Estimate your monthly expenses, multiply it by 12 (to convert to annual expenses), and then multiply again by 25. Once you have this number invested, you can consider yourself financially independent!

- Matt

P.S. Car insurance rates have been up a LOT in the past year. If you haven't price shopped your rate in a few months, comment "car" and I'll send a quick quiz to you on messenger so you can see if you can save any money (free quiz, takes

Read this caption BEFORE you comment, because I'm pretty sure this will trigger the dividend investor crowd!

Dividends are a GREAT perk of investing, but you should NOT be chasing dividends.

First, let me explain. All a dividend is is when a company has extra cash at the end of the year, they get to make a decision. They can either hold it in what is called "retained earnings", which they may use to invest back into the company going forward, or they can pay it out to shareholders as a dividend.

Now why would it not be a good idea to prioritize dividends? Well, look at the definition above. They are literally just paying you out from their earnings. That act in itself doesn't create value, which is what earns investors money. It is simply shifting money that was already made to the shareholders pocket. If they hadn't paid that out, that would be on the company's books as an asset and reflected in shareholder value.

Many dividend investors still have decent return though. That's because companies that have a lot of extra cash to dole out are usually pretty good companies. But you are also excluding all the great companies that don't pay out their cash and focus on reinvesting in their own growth (think of basically all the big tech companies). That's not good for diversification at all.

If you don't believe me, google what happens to a company's share price on their ex-dividend date. The dividend is literally taken out of the share value of the company.

Don't fall for dividend propaganda, invest in broad diversified assets and capture ALL growth, not just dividend growth.

- Matt

P.S. I'm a HUGE index fund guy, so I made a free index fund guide explaining them and laying out options to create an index fund portfolio at different brokers (Vanguard, Fidelity, Schwab, etc). Comment "guide" and I'll send you a link to get the PDF!

Is this more or less than you expected?!

It's hard for me to stay silent when young people say they aren’t worried about investing now because they will make a lot more money when they are older. While this may be true to some extent, it completely fails to take into account how powerful a dollar invested when you're young is.

Let’s say you’re 25 and can put away $500 a month (which would be extremely good). To match that amount when you’re 65, you would have to be putting away $11k/month or $132k/year. The income required to be able to match that $500/mo from age 25 would be several hundred thousand per year, which the vast majority of people will never reach at any point in their lives. I think it’s better to plan like you won’t make more money when you’re older, and if you do then even better!

By the way, these numbers assume an 8% return, which is a conservative assumption for the REAL return of major index funds. That means that $21.72 dollars in 40 years for each dollar invested now is adjusted for inflation, so that's real dollars in your pocket :)

- Matt

P.S. I use SoFi for my high-yield savings accound and they are running a sign-up bonus where you can get up to a $400 with opening a new account and connecting direct deposit. Comment "HYSA" and I'll send you a link to get your bonus!

How much do YOU need to retire?

My post yesterday was about retirement numbers, but it leaves out a bit of the story. Not all money for retirement will be invested. Sometimes you have pensions, social security, or other forms of income that won't be in your portfolio!

That leads to one of the most common questions I get, which is "how do I factor my pension into this?" Well, if you are lucky enough to be a part of the population who still has a defined benefit plan like a pension, this is how you will calculate your retirement number.

The methodology doesn't change really - you still roughly need 25x your annual expenses in liquid investments to retire, you just need to deduct your expected benefit from your expenses before doing the 25x. The same goes for owning a home - if you are going to own your home outright, take that account into your annual expenses in retirement to make sure you aren't way overestimating.

Most Americans will get some sort of social security, but the future of what that looks like is somewhat up in the air. As someone who doesn't plan to retire SUPER soon, I would only include a very conservative social security payment into my retirement calculations to make sure I'm not overestimating how much benefit I will receive.

These are all pretty rough calculations to define your target, but in order to actually retire, it's important to be a bit more detailed than this. Go into all your assets, all your liabilities, all your plans for future expenses, and REALLY map out what you need. But when you're just trying to find a rough number to aim for, this method will get you pretty dang close.

Knowing roughly what your number is can be very motivating and make retirement seem more tangible!

- Matt

With this one simple question, you will never have to worry about which option to choose ever again!

Ask yourself: Do I expect to be in a lower tax bracket in retirement compared to my current tax bracket?

If the answer is yes, you will want to REDUCE your income NOW, so when you retire, you can pay taxes on that money in the lower tax bracket you will then be in.

If the answer is no, you will want to pay taxes NOW, so you don't have to worry about taxes when you retire and are in a higher tax bracket.

When you're young and making theoretically lower income, Roth can be a great option to invest at a low tax bracket and have all that money grow 100% tax free. When you're older and start to make a high income, maybe more than you'll need each year in retirement, you want to save on those pesky taxes and take the traditional route.

This is all great, but what if you don't know? For many of us, we don't know what our retirement budget is yet. That's honestly okay though, make your best bet. Both options will let you invest your money without paying a capital gains tax, so you should come out on top of a brokerage account either way.

But the MOST important thing is that you invest, so if you're asking yourself these questions, you're ahead of a LOT of people.

Make a judgement call over which you think will be better, and start investing! Reevaluate as your income goes up or down and you will be good to go!

- Matt

P.S. Car insurance rates have been up a LOT in the past year. If you haven't price shopped your rate in a few months, comment "car" and I'll send a quick quiz to you on messenger so you can see if you can save any money (free quiz, takes

This is your "still early enough to correct your path if you're behind" warning to try to max out those 2026 retirement accounts if you can!

The reason there are limits on these accounts are because they are SO powerful for being able to build long term wealth. If you have the means, prioritizing the traditional or Roth accounts you have at your disposal is a literal no-brainer.

Whether it's your employer account, your individual accounts, or health related accounts, all of these have the ability to unlock massive tax savings over the course of your life.

If you're behind and still want to max out one (or all) of these accounts, this is your reminder to try to get back on track!

- Matt

P.S. I'm a HUGE index fund guy, so I made a free index fund guide explaining them and laying out options to create an index fund portfolio at different brokers (Vanguard, Fidelity, Schwab, etc). Comment "guide" and I'll send you a link to get the PDF!

If you have access to an HSA, PLEASE consider taking advantage of it!

These are only available if you have a high-deductible health plan (which is usually only a good option if you're young and healthy), but they can make a HUGE difference.

An HSA is an investment account that is specifically used for health expenses (which is a relatively large umbrella when you look at the qualifying list). HSAs have what is called a "triple tax advantage" because contributions are tax-free, contributions are pre-Federal Insurance Contribution Act (F**A), Growth is tax-free, and withdrawals are tax-free. That's a LOT of tax benefit.

And guess what - if you don't want to use it for medical expenses, you can pay income tax on it and use it as other retirement spending once you hit 65. That means it's essentially an $4,400 (2026 limit) extension of your 401(k).

Make sure you check in on your health plan to know if you have access to this option - it's a FANTASTIC account if you do have the option to use it!

- Matt

P.S. I use SoFi for my high-yield savings accound and they are running a sign-up bonus where you can get up to a $400 with opening a new account and connecting direct deposit. Comment "HYSA" and I'll send you a link to get your bonus!