All ETF portfolio

Hi Anon,

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To beat inflation and accumulate wealth for retirement, passive investing into ETFs is definitely a plausible method, especially given your long time horizon.

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One comment I'd make about your choice of ETFs is that IMO, there's no need to invest in both CSPX and VWRA. Instead, you should just choose 1. There is a significant overlap between the 2 ETFs since US large-cap (CSPX) is a major component of a world index (VWRA).

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Pros:

• don't require time and effort
• consistent market average returns
• reasonably diversified while minimising holdings
• beats active investing 90% of the time
• Indices are self-cleansing in nature (poor performing companies in the index eventually get replaced by better ones)

Cons:

• fosters ignorance

Personally, I'm all for passive index ETF investing over active investing. But just make sure that before you make investments, you still do your due diligence to understand what the ETFs you buy entail in terms of risk.

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Hope this helps!

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Regards,

thefrugalstudent

Hi Anon, I am a big believer in passive investing as well. I feel that for the minimal amount of effort required to buy ETFs, the average market returns is the best deal we can get!

Since you want to beat inflation and grow your savings for retirement, ETFs tracking broad indexes such as CSPX and VWRA are perfect for u!

You can also consider some dividend ETFs such as REIT ETFs or STI. I would start with very small allocation to these dividend ETFs as you are young and can take advantage of the longer time horizon and no need for passive income. As you approach your retirement age, you can slowly adjust and allocate more money into these ETFs and build your passive income. ultimately, these will be what u'll be living on post-retirement.

Another thing you can consider is making CPF contributions. 4% return is not small and are essentially risk free. Take advantage of the tax deduction of voluntary contributions and treat it as a safety net.

As for some caveats (i would not call it cons because it's not a downfall):

• You will not beat the market. Instead, you will earn the average market return. As I've said, we should be happy for the little to none effort we have put in.
• there will be times when the S&P500 will collapse 10,20,30,40 and even 50%. We have to be mentally prepared and have the conviction to stay the course.
• Lastly, this is a very slow way to build wealth. There may be times when we see others getting 100% returns. But we must not greed. Because the amount of effort and risk they are taking far outweigh ours.

Hope this helps, all the best on your journey!