Building Wealth the Right Way: My $1.5M ETF Strategy Explained

Dear Traders,

I am drafting this newsletter from an airplane, typing away with my laptop on my lap as I travel to my next destination. There’s something about being in the sky that gives me clarity and perspective—so I thought, what better time to share some thoughts on investing and trading with you?

You have no idea how many times I receive messages from people asking where to invest and which company is the next big one. My answer has always been the same: if you want to day trade, there is no need to hold any long-term position in individual stocks.

If you want to invest, however, that’s a different story. And my advice is this: do not invest in a single stock. You are better off going all-in on a safe, diversified portfolio than buying $5,000 of Tesla, $5,000 of Amazon, or $10,000 of Bitcoin.

Recently, someone on my Instagram persistently asked about META and TSLA. Despite my advice to invest in a diversified ETF, he couldn’t let go of the euphoria of trading individual stocks—just to get that feeling of being a trader. This mindset can be dangerous for long-term wealth building.

Warren Buffett once said: “The average investor will be better off investing in a low-cost index fund than trying to pick individual stocks.” This wisdom holds especially true for retail traders.

My Portfolio and Approach

As many of you know, I have a significant position in VOO, and I plan to keep it. Currently, it is up by $1.5 million in unrealized profit, and I collect approximately $100,000 in dividends annually from this position alone. It has been a fantastic investment, and I took this position live in our chatroom last year.

My current investment portfolio is structured as follows:

• 4 real estate properties
• 70% of my liquid assets in VOO (an ETF tracking the S&P 500 Index)
• 10% in high-quality investment-grade bonds (VCLT)
• 20% in short-term money market cash

As I grow my investment portfolio, I am gradually increasing my bond allocation. Bonds become increasingly important as you get older because they offer more stability and income compared to stocks. When you are younger, you can afford to take more risks with stocks for higher growth. But later in life, you typically want less volatility and more reliable income. This is the idea behind the classic 60/40 portfolio—60% stocks for growth and 40% bonds for stability and income.

I am, however, largely done with investing in real estate. High-interest rates, the expensive Vancouver property market, and a hostile environment towards property owners (high taxes, rent control, anti-flipping laws, tenant protection regulations) have made real estate less appealing. While this may change in the future, for now, I will not be adding more properties. If I want to live in a luxury place, I will simply rent.

Why ETFs Over Individual Stocks?

For the majority of you, investing in the S&P 500 index through ETFs like SPY or VOO is the best approach. VOO is Vanguard’s flagship ETF, market-cap-weighted, comprising the 500 largest companies across 11 sectors. By investing in VOO or SPY, you get exposure to everything: TSLA, AAPL, crypto, Bitcoin, real estate, China, and emerging markets—all in a diversified, professionally managed fund.

Yes, there are exciting opportunities in real estate or Airbnb investments, but why bother managing them yourself when Real Estate Investment Trusts (REITs) are already doing it professionally with the lowest possible fees?

Some of my friends are moving to Colombia to buy properties because of the low prices and attractive rental yields. However, they overlook the currency risk. Converting your hard-earned USD into Colombian Pesos (considered a volatile currency) exposes you to depreciation risk. A 30-40% rental return is not attractive if the currency depreciates by 25% annually. Emerging market ETFs do this type of investing for you while professionally hedging currency risks.

So, why bother with individual investments?

I strongly advise against it unless you are a sophisticated investor. Even if you have a small capital of $100,000, you are better off putting it all into VOO or SPY and forgetting your password. This approach is far superior to stock picking, meme stock gambling, or blindly following Elon Musk or other businessmen.

Diversify into VOO and sleep soundly.

Leveraging Your Portfolio

If you want to be more aggressive, you can use leverage on your positions with Interactive Brokers, perhaps up to 20%. Alternatively, you can buy a 1.5x or 2x leveraged S&P 500 ETF, such as SSO. However, stay away from 3x leveraged ETFs like TQQQ or SPXL for long-term holding, as they get decimated during normal market pullbacks.

Final Thoughts

The key takeaway: define whether you are a trader or an investor, and set your trading and investing goals accordingly.

I can share what I did with my portfolio, and I am genuinely happy and satisfied with it.

If you want to learn trading, come and join me in Vancouver or in the chatroom!

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Happy trading,

Andrew