Want VOO and QQQ more? 6 evaluations easily help me invest over 60% of my salary.

You have decided to invest in VOO and QQQ, as you have known the pros and cons of them.

But, here’s the question, how much should you invest in them? 

And, are there amount limits for it?

Hence, I will explain to you the amount limitation of it, and if you want to decide the amount, what aspects should you take into account, and finally, share my experience how to decide it.

Now let’s start!

Are there any limits to invest in VOO and QQQ?

To check if there’s limitation, I will start from the brokerage type you used:

US Brokers

Most US brokers, like Charles Schwab, Fidelity, Robinhood, Interactive Brokers and Vanguard, are providing the fractional shares transaction, meaning that you don’t need to be constrained by the minimum order qty of 1 stocks.

VOO QQQ US brokers

Currently, except Schwab has a minimum limit amount of $5, you can invest only $1 in other brokers.

For non-US users, if you have opened your individual account in US brokers, you have to take the bank transaction fee into account, as they require you to put your funds in their designated bank accounts, especially when you transfer from non-US countries.

Non-US Brokers

Non-US brokers that have sub-brokerage to US stocks, also provide the function to buy fractional shares, and you can set to periodically buy it. You can contact them if you want to learn more about this.

Overall, the limits only occurred on the minimum investment amount in fractional shares, and the bank transaction fee for non-US residents. Seems they are not big issues for us.

What aspects should I evaluate?

Knowing the limits, now let’s decide how much you should invest in VOO and QQQ. 

Here are 6 aspects you should consider:

Your personal finance status

First, you should know your personal financial status.

Most people always say they want to invest VOO and QQQ, but actually, it’s hard for them to even take a $1 investment.

The reason is obvious: they don’t know how much they earn and spend.

To invest, you should use your surplus, or in brief, your savings. And to save, your spending must not suppress your income. 

It’s the most basic rule of investment, but not so many people understand this.

Will your income continue to grow?

The second one is related to the first point, that is the growth of your income.

Once your salary can grow constantly, either by yearly adjustment or change of job, your investable amount can also increase, when your spending still keeps at the same level.

The more salary your increass, the more you can invest in VOO and QQQ.

So, if you think your salary is too low, please consider changing to a higher pay job.

Is there a room to cut your spending?

It also corresponds to the first aspect.

Some peoples’ problem is not on how much they earn, but on how much they spend, especially on those with high salaries.

In common, people tend to increase their spending as their salary rises, and such action is unconscious.

And, with the assistance of social media, like IG, tik tok, or X (ex Twitter), people can easily see others’ lives, and want to live the same style. 

This makes overspending worsen.

So, if you think your salary is good enough, please examine if you have spent too much, that will be helpful for your investment.

Any plan for the big expenditure in the short time?

Before investing in VOO and QQQ, you have to ask yourself if you plan to have expenditure in the short term, like traveling, buying a car, or buying a house.

For such expenditures, it is better to keep them in the deposits, not to invest them in VOO and QQQ, in case of any damage from investment when you pay the bill.

Hence, if you have plans for this, please exclude them from your investment amount.

Your personal risk tolerance

Your risk tolerance is an important aspect for evaluation.

Just simply ask yourself, if you face depression like 2020 and 2022, those have 30% loss on VOO and QQQ, how can you endure and get through such tough times, and can you still eat and sleep well?

That’s the point to decide if you can keep your holding well, cause investing VOO and QQQ is a long journey.

What’s your goal for asset accumulation?

The last one is, what’s your goal from investing VOO and QQQ?

The most common goal is to accumulate a level of money before retirement, such as $1M or $2M.

If you cannot find your gold to invest in both ETF, you can set the common goal first, and adjust it gradually.

How do I decide ?

Finally, let me share how I decide my investment amount.

My way to decide the amount is really simple, just invest over 60% of my yearly salary, including bonus, in VOO and QQQ.

Once I decide the amount to invest, I allocate them into 12 months evenly, so my maximum monthly spending is also decided, and keep it in my mind.

And, to reach the goal for this, I also have bookkeeping on my every spending, to make sure it’s within the range.

This way may be old fashioned, but it did help me to save and invest 60% of my yearly salary in 2023.

You don’t need to set such a high goal like me, just start from native level, maybe 10% or 20%, it can also have good results for you.

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