The Only 3 ETFs I'd Buy in 2025 If I had to start over

Let’s imagine for a moment that you lost everything tomorrow. Scary thought, right? But what if you could wipe the slate clean and rebuild your financial future with a strategic plan? After over 20 years of value investing and learning the ins and outs of the market, I can tell you this: You can build wealth without it being complicated.

In fact, if I had to start over from zero in 2025, there are only three ETFs I would buy to help secure a future worth millions. Why? Because these ETFs are the cornerstone of a solid investment strategy that can lead to financial independence and a comfortable retirement. In this blog post, I will take you through each of these ETFs, explaining their benefits, strategies for investing, and how they can help you reach your financial goals.

What Is an ETF and Why Should You Care?

Understanding what an ETF (Exchange-Traded Fund) is can completely change the way you approach investing. An ETF is essentially a basket of stocks. When you buy one, you’re not just investing in one company—you're purchasing a small piece of many companies all at once. This instant diversification significantly reduces risk compared to investing in individual stocks.

Here are some reasons why ETFs are a smart choice:

• Low Cost: ETFs generally have much lower expense ratios compared to mutual funds. For example, the average expense ratio for mutual funds ranges from 1-2%, while many ETFs are under 0.1%.
• Easy to Purchase: You can buy and sell ETFs through your brokerage just like stocks, taking advantage of real-time pricing.
• Performance: Research shows that ETFs often outperform actively managed mutual funds because they eliminate emotional decision-making in investing.
  
  Warren Buffett, one of the greatest investors of all time, has repeatedly recommended that the average person invest in low-cost S&P 500 index funds. He believes this strategy will beat the majority of professional fund managers over time. So, why not take his advice?

The First ETF: VOO (Vanguard S&P 500 ETF)

The first ETF I would invest in is VOO, the Vanguard S&P 500 ETF. This fund gives you exposure to 500 of the largest companies in the U.S., including household names like Apple, Microsoft, and Amazon.

Here’s why VOO is a solid choice:

1. Diversification: By owning VOO, you’re essentially owning a slice of the entire U.S. economy.
2. Performance History: The S&P 500 has a history of strong long-term returns, averaging around 10-11% annually.
3. Low Fees: The expense ratio for VOO is an astonishing 0.03%. Compare that to the average mutual fund, which might charge you $100-$200 for every $10,000 invested.

Imagine this: If you invest $10,000 in VOO, you're only paying $3 a year in fees. Over time, that difference can add up to hundreds of thousands, if not millions of dollars.

Now, if you're worried about the current price of VOO—around $567 a share—don’t be. Many brokerages offer fractional shares, allowing you to invest smaller amounts while still reaping the benefits of this powerful ETF.

The key strategy here is dollar-cost averaging. This means consistently investing a fixed amount over time, regardless of market conditions. This way, you'll buy more shares when prices are low and fewer when they're high, ultimately averaging out your cost.

The Second ETF: SCHD (Charles Schwab High Dividend ETF)

The second ETF on my list is a bit controversial, but it plays a crucial role in building wealth: SCHD, the Charles Schwab High Dividend ETF. This fund focuses on high-quality companies that pay dividends, such as Coca-Cola and Cisco Systems.

Why invest in SCHD?

• Reliable Income: SCHD has a dividend yield of around 4%. This means that for every $10,000 you invest, you’re earning about $400 each year just from dividends!
• Stability: Companies that pay dividends typically have solid financials, which means they can weather market downturns better than non-dividend-paying stocks.
• Tax Advantages: If you're investing through tax-deferred accounts like an IRA or 401(k), you won't have to pay taxes on those dividends right away, allowing your investment to grow even more.

When the market gets rocky, people often flock to dividend-paying stocks because they provide stability. You’re not chasing after high-flying tech stocks that can be volatile; instead, you’re building a dependable income stream that can support you in retirement.

Remember: While many investors obsess over dividends, it’s crucial to focus on owning good companies. The ability to pay dividends indicates that a company has strong cash flow and manageable debt, which is essential for long-term success.

The Third ETF: QQQ (NASDAQ 100 ETF)

Last but not least, let’s talk about QQQ, the NASDAQ 100 ETF. This fund includes the 100 largest non-financial companies on the NASDAQ, making it heavily tech-oriented. Major players like Nvidia, Amazon, and Tesla are part of this ETF.

Here’s why QQQ is crucial for growth:

• High Growth Potential: QQQ consists of innovative companies that are at the forefront of technology and digital infrastructure. Investing in this ETF positions you well for the future.
• Historical Performance: During the tech bubble, QQQ did experience significant volatility; however, if you had invested at the peak in March 2000, you would still have seen a 14-15% annualized return today.
• Strategic Allocation: While I wouldn’t recommend making QQQ a third of your portfolio, I believe it should play a smaller, but vital role. For younger investors, this ETF can offer higher returns over time, especially if you can withstand short-term volatility.

Investing in high-growth companies can lead to incredible long-term growth. However, it’s essential to be mindful of the risks involved. You want to capitalize on downturns rather than panic sell during market dips.

How to Strategically Allocate Your Investments

Now that you know the three ETFs I would invest in—VO, SCHD, and QQQ—let’s talk about how to allocate your funds among them.

• Younger Investors: If you're in your 20s or 30s, consider allocating a higher percentage to QQQ. This is because you have time to ride out market fluctuations.
• Mid-Life Investors: For those in their 40s and 50s, a balanced approach with equal weight on VO and SCHD is advisable for stability and income generation.
• Retirement Investors: As you approach retirement, shift your focus more towards SCHD for its reliable income stream, while still maintaining some exposure to VO for growth.

Let’s do some quick math: If you start with a $100,000 investment at age 30, saving $10,000 each year, and expect a 9.5% return from low-cost ETFs, you could end up with approximately $6.6 million by age 65. However, if you invested in actively managed mutual funds, which often underperform and come with higher fees, your final amount could drop to around $4 million. That’s a staggering difference of $2.6 million!

Conclusion: Take Action Now!

The reality is that investing doesn’t have to be complicated or overwhelming. By focusing on these three ETFs—VO, SCHD, and QQQ—you can create a solid foundation for your financial future.

But don’t just stop at ETFs. Consider implementing strategies like covered calls and cash-secured puts to generate additional income on your investments. This could mean the difference between retiring comfortably and struggling to make ends meet.

If you’re serious about building wealth and ensuring a secure retirement, click this link to access our FREE Guide on options strategies. It’s the first step towards taking control of your financial destiny.

Remember, most investors never learn how to buy individual stocks the right way. Don’t be one of them!
Click the link to watch the full video and learn more about how to build real wealth through informed investing. It's time to stop leaving money on the table and start making your money work for you. Watch the full video here!

Thank you for your time. Let’s make 2025 the year you take charge of your financial future!

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