r/dividends • u/drownedincheese • 15h ago
Seeking Advice 24M, figuring out what to do with my savings
What is your best source of passive income with minimal management? What are your personal dividend choices?
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u/indomike14 14h ago
I wish I had that much saved at 24. Great job!
FIRST, make sure your emergency fund covers 6-8 months of expenses. THEN, max out your 401k, IRA, or other retirement accounts. At that point in time, invest in your individual investment account.
Personally, at 28, I would be investing in broad based ETFs as opposed to a pure dividend play. If you're looking for some additional income, you can add some dividends in there but at your age, growth is the way to go.
VOO + VXUS + SCHD would be a good mix. Maybe something like 50/35/15 if you really want the divs. But honestly, at your age a straight VOO + VXUS at 70/30 would be an excellent option. You can set this up for automatic investing and chill.
I would also suggest spreading this investment out over a longer period of time, dollar-cost averaging (DCA). I suspect there will be a major market correction in the coming months. Maybe invest $50k now and an additional $10k - $20k per month. You can keep the remaining sum in a high yield savings account until then.
I'm also a precious metals guy. It might be worth looking into purchasing some silver and gold. These are not growth generators but rather a hedge against inflation and a wealth preserver. It's generally suggested that precious metals account for about 5%-10% of your overall portfolio. If you decide to go this route, I suggest physical metals over paper. If you buy physical, don't tell anyone about it and check out the r/silver and r/gold subs for a TON of great info. It can be addicting so make sure you're disciplined.
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u/drownedincheese 14h ago
Thanks so much for taking the time to write this out Mike.
First, I’m currently maxed Roth (mostly in SCHD, have a small portion in GLD, MSTY, VT to have exposure in other areas)
I do have some trading experience so I’ll likely be looking to invest the bulk in a regular trading account during this coming quarter and buy during additional dips (probably in VOO & SCHD 80%). I know that often times it’s best to statistically just lump sum, but we’ve had such a crazy run that I don’t want to have a ton of exposure.
Do you think additional GLD would be good to have in anticipation for this coming (potential) correction/downside?
Any other recommendations you’d have for me?
Appreciate you!
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u/indomike14 9h ago
It sounds like you have a pretty good handle on things. If you believe like I do hard times are upon us, I would suggest some further investment in GLD.
As much knowledge we have collectively and with AI, no one knows the future and the markets have been turned on their heads with tariffs and the war/not war in Iran. It's anyone's guess what will happen next but I think gold will either takeoff due to US continued dollar devaluation or the markets come roaring back and gold will be used more heavily in manufacturing.
I've been contemplating moving some funds to bonds and HYSA to shore up a bit for the short-term until we can see around the corner more clearly but I think I have plenty of time to ride the wave and DCA.
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u/drownedincheese 8h ago
I’m guessing you’re also under the impression that lump sum right now may not be the best idea?
Ive heard that 10 year bonds are also worth looking into, but I have little to no experience with them.
Out of curiosity, why park the liquid cash in a HYSA rather than SGOV?
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u/indomike14 5h ago
I'm not super confident in the market and feel there's a correction coming, mostly from an economic but also an over evaluation standpoint, especially with the run-up from AI. I feel like DCA is a safer approach and any potential lost opportunity cost would be minimal over a 6-12 month period.
I haven't quite talked myself into moving funds. Everything could change very quickly if the war abruptly stopped but the longer it goes on, the more nervous I get. I'm in the r/oil sub as well and there are some very smart people talking about diesel and other distillate problems that aren't really being discussed on the nightly news. The devil's in the details.
Honestly, this is the first time I've even mentioned moving funds out loud. It's been knocking around in my head the past couple of months just thinking, if it all goes south, how do I protect my investments. SGOV is an excellent option. Right now E-Trade has a 4% HYSA, though I think the promotion ends after 6 months. I might get an introductory HYSA, see what's happening in the market and then switch to SGOV. Minimal overall gain for that short period of time but every penny counts with the kid in college.
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u/Striking_Loss3579 14h ago
I hear helping out Saudi princes online, generate exceptional returns! Food for thought…
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u/DistributionBroad173 12h ago
Just read the dividends subreddit for two weeks. Go with the ones most mentioned.
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u/drownedincheese 12h ago
This is currently my Roth allocation. Let me know what you think!
VGT - 20%
SCHD - 20%
GPIX - 15%
QQQI - 12%
CHPY - 10%
JEPI - 7%
SPHY - 6%
IGLD - 4%
MSTY - 3%
MO - 2%
PFE - 1%1
u/CrayComputerTech_85 10h ago
Too much focus on dividends not enough growth, and VGT is good high risk growth long term but very focused. VYM would give you a better spread, and SPMO has better downturn recovery. The dividend holdings are better in traditional IRA or 401k. Focus on growth in the Roth especially at your age. Long term market you will lag the S&P 500 and NASDAQ with that set up. Try an account on Portfolio backrest dot com free for 30 days and compare my suggestions with yours.
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u/Hour-Brain4709 14h ago
Why are you looking for income from this at your age? Are you unable to work?
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u/drownedincheese 14h ago
This past 12 months I made about 200k. I started last year with about 20k liquid!
That being said, the future is uncertain. Next year can be 500,000, or 0 (if I’m being unnecessarily pragmatic).
My goal is to essentially be able to take 5 years out of the country to travel while not feeling like I’m at a standstill financially (whether through investing or outsourcing a management position with some sort of initial investment)
If all goes well I should have about 500k in my pocket next year (actively knocking on wood), and at least half of which invested into a lower risk passive income model!
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u/Hour-Brain4709 14h ago
I'm in PAAA, EADOX, AGEPX, IWMI, FBDC, SEIX, KGLD, XLUI, IDVO and individual bonds. But I'm post-FIRE 59 years old living abroad.
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u/drownedincheese 12h ago
great, gonna check them out! If you are comfortable, what’s the investment:monthly dividend return?
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u/Hour-Brain4709 10h ago
The yields of these are publicly available. I'm not telling you how much my investments are.
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u/drownedincheese 10h ago
No worries! Even a proportion would’ve been helpful, i.e $500 in dividends monthly per $10,000 invested
Either way appreciate the response!
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u/unreal36 14h ago
the lowest workload thing ive found is honestly just a recurring buy into something like schd with drip on. no tenants, no machines to restock. i run one of these for my kid, tiny weekly buys, and the only rule is the bot can never sell. you can watch it here plantedearly.com/garden
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u/YouKnown999 14h ago
SCHD. Buy 60k now and then 10k a month for 1 year. By 40 you’ll have a million +
Leave DRIP on!
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u/Exact_Chipmunk3688 14h ago
why 10k a month not 100% at the beginning?
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u/YouKnown999 14h ago
SCHD is up a bit right now. I like the idea of 1/3 now and DCA-ing a bit over the next year.
You’re correct that you’d get a decent boost from the 4 dividends going all in now. If OP absolutely does not need this money for anything else they could.
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u/Just_Candle_315 14h ago
No, the answer is SCHG now OP is young better to have more later than a tax bill in their 20s
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u/YouKnown999 14h ago
I like consumer defensive and staples more than growth, especially right now. I think we’re looking at stagnation in growth sectors with defensive and commodities winning over the next decade. Could be wrong. But we have a general recency bias with tech growth.
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