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Revealing My $75,000 Roth IRA | Vanguard Index Funds - YouTube
Channel: Stephanie Talks Money
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I just reached a super exciting milestone
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for my Roth IRA.
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It just hit a balance of $75,000.
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And to celebrate this accomplishment
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I'm going to reveal to you what's in my Roth IRA.
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Now the intent of this reveal
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is to show you that you can do the same thing too.
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I started my Roth IRA 10 years ago.
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So this is a result of 10 years of investing
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and dollar cost averaging.
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And when I started my Roth IRA
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I wasn't maxing it out.
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I was only putting in $50 a month.
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And then a few years after I opened it
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that's when I started getting really serious
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about personal finance and investing.
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And that's when I started maxing out my Roth IRA.
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I have my Roth IRA through Vanguard
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and all I invest in my Roth聽
IRA is Vanguard index funds.
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So enough of me talking.
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I know you just want to see what I have.
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And so I'm going to go through each fund I have
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and explain why I have it
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and maybe some reasons why
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you might be interested in investing in it too.
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So here is my index fund.
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You can see I have a balance of $75,522.14.
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My largest holding is VFIAX
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the S&P 500 index fund.
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I have a little over $29,000
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in my S&P 500 index fund
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and that's about 39% of my portfolio.
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Now I have invested in this fund since day one.
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And it's all because of Warren Buffett.
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In a letter to shareholders that he wrote
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I believe it was in 2014
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he told the shareholders that if he were to pass
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he would direct his wife to invest 90%
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of their money into an S&P 500 index fund
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and he specifically called out Vanguard.
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That is primarily the reason why
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I opened a Vanguard account in the first place.
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And since he believes so strongly
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in investing in an S&P 500 index fund
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and he's a great investor himself
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I decided that that's where
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I would direct a lot of my money as well.
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*meow*
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Fiona agrees!
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VFIAX tracks the S&P 500
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so it's a collection of
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the 500 largest stocks in the market.
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If we just take a quick look at the fund profile
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you'll see that in one year this fund grew 40%
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That's insane.
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And if you look at other years they have on here
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like 3 year, 5 year, it's around 15%.
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And you have to look at the largest holdings
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because these are companies
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that everyone invests in anyway.
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Apple, Microsoft Alphabet,
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Amazon, Facebook, Tesla,
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Berkshire Hathaway,
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NVIDIA, Chase, and Johnson & Johnson.
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The S&P 500 is made up of very good stocks
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and this is a great index fund
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to get good exposure and growth
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for your long-term investments.
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My next largest holding is VDADX
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Vanguard's Dividend Appreciation Index Fund
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and this makes up a little聽
over 21% of my portfolio.
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This fund has great dividends
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and that's why I selected聽
this fund for my Roth IRA
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Because dividends in a Roth IRA are not taxed
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so all this dividend income聽
I'm getting in my Roth IRA
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is reinvested and it's not taxed.
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If we take a look at the fund profile
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And for those of you who聽
aren't familiar with VDADX
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it is a fund that focuses on dividend stocks
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and companies that increase
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their dividend consistently over time.
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And let's look at the growth聽
of this fund for one year.
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It's 34%
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That's unheard of.
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And if in case you're wondering
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about the top 10 largest holdings
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again some really great dividend companies.
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Microsoft, Johnson & Johnson,
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JPMorgan Chase, Walmart,
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Visa, United Health, Home Depot,
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Procter & Gamble
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and the list goes on and on.
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This fund does have a higher dividend yield
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than most the other funds
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and it's primarily because it's a dividend fund.
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If you don't want to pick聽
individual dividend stocks
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for your portfolio
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a dividend index fund is a great choice
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because you'll still get a higher dividend yield
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compared to other index funds.
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The third largest holding in my Roth IRA is VTIAX
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Vanguard's Total International Stock Index Fund.
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I decided to invest in an international index fund
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to get exposure to companies聽
that are outside the US.
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This diversifies my portfolio
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meaning I spread out my risk even more.
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Plus just because a company is outside the US
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doesn't mean it's a bad company.
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There are plenty of great companies out there
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that we don't invest in
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because we focus on US stocks.
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So let's take a look at this since.
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This is an international index fund
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so we need to look at other things
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that we don't normally consider
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when looking at US index funds.
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And the first is the composition of the portfolio
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which is how the regions of the world
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make up this portfolio.
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The largest part of this portfolio
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at 40% is Europe
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and then you've got about 25% each
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of emerging markets and Asia Pacific.
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You've got about 7% north america.
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So that would include companies
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in Mexico and Canada.
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And under 1% of Middle聽
Eastern companies and other.
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Now I can guarantee you
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in looking at this list of top ten holdings
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you're going to recognize
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pretty much every company on here.
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Taiwan Semiconductor, Samsung,
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TenCent Holdings, Nestle, Alibaba,
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ASML, Roche, Toyota,
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LVMH, which is the luxury brands,
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and Novartis.
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As you can see,
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this international fund pulls from
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various different regions
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and various different companies of different types
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and that's why I like to聽
include it in my portfolio.
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Because it allows me to grab
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pieces of the markets here and there
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across the world.
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And next we have VIMAX.
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VIMAX is the mid-cap index fund
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and VIMAX makes up almost 11% of my portfolio.
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I wanted to invest in a mid cap
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because those are notorious for large growth.
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Plus those companies tend聽
to be a little bit smaller
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and it's good to have exposure
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to large companies and small companies
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in your portfolio.
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If you look at the performance
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it's had 47% growth in the last year.
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In three and five years it's 16% and 15%.
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Again excellent growth for an index fund.
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Now let's look at some of the stocks in here.
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IDEXX Laboratories, DocuSign, Chipotle,
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and the list goes on.
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And coming in at about 7.5%
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of my portfolio is VSMAX.
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VSMAX is a small cap index fund.
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I wanted to invest in small cap funds because
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again they have the potential for more growth.
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Now this is a smaller portion of my portfolio
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because they are more risky
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but I think the potential for growth
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outweighs the risk.
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So let's take a quick peek聽
at the fund profile page.
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Okay so the growth in one year is 56%.
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That's the highest out of any fund
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we've looked at so far.
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And the 3, 5, and 10 year are all pretty much
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in line with other index funds.
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And if you look at the 10 largest holdings
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a lot of people haven't heard of these.
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I'm looking at this list right now
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and the only two I've heard聽
of are IDEX and Entegris.
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Everything else, I don't know what they do,
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but you know what they grow a lot
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and they make me money.
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And the very last fund I聽
have in my Roth IRA is VBTLX
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Vanguard's Total Bond Market Index Fund.
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It makes up around 7% of my Roth IRA.
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And as you see,
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I don't have a lot of bonds in my Roth IRA.
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7% is a little too small for my portfolio
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considering my timelin
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but I do have bonds in my 401k.
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And I have more than 7% bonds in my 401k.
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I think right now it's around 15%.
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So I feel like between the 15% bonds in my 401k
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and the 7% bonds in my Roth IRA
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that averages out to around where I want to be
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in terms of my overall portfolio
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and the percentage of bonds.
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There's two reasons why I聽
have bonds in my Roth IRA.
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The first is that the interest聽
from the bonds is not taxed.
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As I mentioned before,
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dividends are not taxed in a Roth IRA.
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So by having all of my bonds聽
in a non-taxable account
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I don't have to pay any taxes on my bond interest.
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And the second reason I invest in bonds
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because I want a little bit聽
of stability in my portfolio.
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Bonds do not grow very fast.
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These are funds you want to invest in
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if you want to keep your money relatively safe.
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You won't match the market
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but that's not the point of a bond.
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Ew, one year is actually negative.
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That's terrible.
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But 3 year, 5 year, 10 year
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you're getting between 2% and 5% returns.
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So again this is to keep your money stable
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and it's not to grow your money.
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And ideally as you get closer聽
and closer to retirement age
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you would want to move more of your money
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towards bonds so that way
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you don't risk a huge downturn in the market
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and losing all your money right before you retire.
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And that's what got me over聽
$75,000 dollars in my Roth IRA!
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I really hope you enjoyed this peek
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into my Vanguard index fund Roth IRA.
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If you liked this
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please let me know in the comments below.
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Maybe I'll do some kind of other portfolio reveal.
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But the main message
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I want for you to take from this video
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is that you can do this too.
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I've got $75,000 because I聽
saved and invested for 10 years.
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Investing in a Roth IRA is really easy.
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All you have to do is open an account
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and start investing money聽
and dollar cost averaging.
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That's it!
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And then in 10 years you聽
might be able to have $75,000.
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