In July last year, an investor shared his success story, detailed portfolio and tips on r/Dividends, a discussion board on Reddit with over 600,000 members.
The investor said he started investing at the age of 44 with $25,000. At the time of his post, he was 50 and his portfolio value had reached $438,000.
But that’s not it. He had about $20,100 in estimated dividend income from his portfolio.
“Wish I’d have started when I was 20, I’d be retired now. Remember it’s never too late to start so don’t give up,” he said.
The investor said his income averaged about $60,000 to $100,000 per year, but his expenses were low, at around $2,000 per month. He said he always managed to “dump” extra cash in the stock market.
“I sold anything in my home I didn’t need and put the money into the portfolio. You’ll be surprised what you can sell on FB Marketplace. I also put an ad on Craigslist saying I would take anything for free. I sold some things people gave me for a few hundred $’s and added this to the portfolio.”
“Some years I was able to put away up to $35k per year, other years less. I bought index funds and oil stocks at first; my dividends weren’t at the forefront because I didn’t know any better. Once I had built up a portfolio and interest rates rose, I moved some money from riskier oil stocks to VTI and VUSXX.”
Portfolio Value Doubled Thanks to ‘Stupid Risks’ In Oil Stocks
But how did his portfolio go from $25,000 to $438,000? In addition to compounding, the investor’s risky bets paid off.
“I managed to double my portfolio by taking some stupid risks in oil stocks that happened to work out well. Could have quite easily gone the other way,” he said while answering a question.
The investor advised Redditors to start investing from whatever they had, even with $50 and let the compounding effect work over the long run. However, he urged investors not to forget the real goal of investing and the purpose of money.
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“We spend too much time becoming financially agitated thinking about money. My friend died of cancer at 41 years old and didn’t enjoy anything he had saved throughout his working life. Yes, be responsible but enjoy yourself.”
He said that since he started investing late, he took high risks, invested in oil and tech stocks and kept taking profits, with a goal of early retirement. However, he was now investing in a money-market fund to enjoy high yields.
“I’ve owned lots of traditional dividend stocks like AT&T, Verizon and XOM over the years but now I’m heavily in the safety of VUSXX route for now while it’s paying 5%.”
The investor shared detailed screenshots of his portfolio. Let’s examine some of his biggest positions.
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Vanguard Treasury Money Market Fund
The Vanguard Treasury Money Market Fund (VUSXX) is a money-market fund that gives investors exposure to U.S. Treasury securities. It was the biggest holding of the investor, whose portfolio went from $25,000 to $438,000. The Vanguard Treasury Money Market Fund invests in short-term treasuries and yields about 5.7% as of August. It’s another suitable fund for investors in search of stable monthly income. VUSXX accounted for about 67% of the investor’s total portfolio.
Vanguard Total Stock Market Index Fund ETF
Vanguard Total Stock Market Index Fund ETF Shares (VTI) made up about 20% of the investor’s portfolio. VTI tracks the total stock market, exposing investors to small, mid- and large-cap stocks. About 69% of the fund is allocated to large-cap stocks. The fund’s portfolio includes more than 3,600 stocks. Among the top holdings of the ETF are Apple, Microsoft, Nvidia, Meta Platforms and Amazon.
SPDR Gold Trust
SPDR Gold Trust (NYSE:GLD) was the third-largest position of the investor, who saw his portfolio rise from $25,000 to $438,000 and reach $20,000 in annual dividend income. The ETF provides investors with direct exposure to gold’s price movements without physically holding gold bars or coins. It is up about 34% over the past year.
The Vanguard Emerging Markets Stock Index Fund ETF
The Vanguard Emerging Markets Stock Index Fund ETF (NYSE:VWO) is a suitable option for those looking to gain exposure to emerging markets like China, Taiwan, South Africa and Brazil. VWO tracks the FTSE Emerging Markets All Cap China A Inclusion Index. It also pays quarterly dividends and yields about 2%. Some of the fund’s biggest holdings include Taiwan Semiconductor, PDD Holdings, Infosys and Alibaba, among many others.
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Kaleyra Inc.
The investor, whose portfolio worth increased from $25,000 to $438,000, had mobile communication services company Kaleyra in his portfolio. In June, Tata Communications announced it would acquire the company for $100 million and debt. Tata completed the acquisition in October and Kaleyra is no longer a publicly listed company.
Vanguard Total Stock Market Index Fund Admiral Shares
Vanguard Total Stock Market Index Fund Admiral Shares (MUTF: VTSAX) was the sixth-biggest holding of the investor, whose portfolio worth rose to $438,000 from $25,000.
The ETF exposes investors to the entire U.S. stock market, including small-, mid- and large-cap stocks. Its portfolio consists of more than 3,600 stocks. The fund pays quarterly dividends and yields about 1.2%.
Apple
The investor, who earns about $20,000 in annual dividend income and has a portfolio of $438,000, said Apple Inc. (NASDAQ:AAPL) was part of his portfolio. Apple shares have gained about 250% over the past five years and the company has a dividend yield of 0.4%.
Deutsche Bank
German banking company Deutsche Bank AG (NYSE:DB) is another notable dividend stock in the investor’s portfolio who saw his portfolio jump from $25,000 to $438,000. The stock has a dividend yield of about 2.9%.
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Vermilion Energy
Vermilion Energy Inc. (NYSE:VET) is a Canadian oil and gas producer with a dividend yield of about 3.5%. The company posted third-quarter results earlier this month. Revenue in the period rose 3.1% year over year.
Cenovus Energy
Cenovus Energy Inc. (NYSE:CVE) is a Canadian oil and natural gas company with a dividend yield of about 3.2%. The stock accounted for about just 0.4% of the investor’s total portfolio.
VAALCO Energy
Texas-based VAALCO Energy, Inc. (NYSE:EGY) was another energy dividend stock in the investor’s portfolio. The stock pays a $20,000 dividend income per year and has a dividend yield of about 4.5%.
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This article ‘Stupid Risks That Worked’ – Investor Whose Portfolio Went From $25k to $438K in 6 Years Shares Holdings: Top 11 Stocks, ETFs originally appeared on Benzinga.com
