Many people aspire to achieve financial freedom one day, especially as the pressure of survival has been increasing in recent years, making this aspiration more widespread.
After observing my long-term investment in VOO and QQQ, many people often wonder, “Can buying VOO and QQQ really lead to financial freedom?”
I have previously shared that reaching your financial freedom goals with VOO and QQQ requires meeting five conditions. Therefore, the focus here will be on sharing the three things I have personally found most profound on this journey. And it’s not just me; if you’re currently executing this strategy, you’re likely to feel the same way.
So, let’s get started!
VOO and QQQ won’t make you rich, but they can ensure you have no worries about your basic needs
The first thing to note is that investing in VOO and QQQ won’t make you wealthy, but it can guarantee that your future life won’t encounter too many obstacles.
We must understand that investing in these two ETFs requires a long-term mindset, at least 10 years, or even 30 years. It’s unlikely to see significant results in the short term.
Moreover, the accumulated amount of investment may not be as much as you imagine. It might only be around 1-2 million (of course, this depends on how much you invest and whether you continue to increase your investment).
If you’re aiming to accumulate billions and become wealthy, I’m sorry, but that’s quite challenging.
But looking at it another way, even if you can only accumulate several millions in the end, it can still ensure that we have no worries about our basic needs in the second half of our lives.
When the amount reaches a certain level, you may consider transferring all of this money to safer or more stable cash flow assets, such as bonds or high yield ETFs, or keeping the money in VOO and QQQ
Regardless of the method, you can still receive a certain amount of cash flow every year (bond interest or dividends), reducing the need to sell VOO and QQQ each year, or even avoiding selling altogether.
These continuous cash flows are also sufficient to cover our future living expenses.
Based on my own calculations, by the time I retire at 65, I can accumulate at least 2 million or more. Without selling stocks, assuming a dividend yield of 1.5% for VOO and deducting 30% for taxes, I can receive $21,000 annually, equivalent to at least $1,750 per month. This is enough to secure my future life.
Don’t expect investing in VOO and QQQ to make you super-rich, but it can ensure that you won’t be “poor except for your house” and can live better than others.
You must gradually increase your investment amount
The second insight is that you must gradually increase your investment amount to make more money with VOO and QQQ.
You often see many experts sharing strategies like investing a few hundred dollars regularly, and even small investors can accumulate millions. This may lead you to believe that by continuously investing a few amounts and keeping everything else unchanged, you can really accumulate millions.
I can’t say this is wrong, but I can only say it’s just a starting point. You still need to steadily increase your investment amount.
The reason is simple: when you start investing and see that your assets are still relatively small, your sense of insecurity will drive you to unconsciously increase your investment amount.
For example, if you start investing $300 every month, after 1 to 2 years, you may find that your assets have not accumulated as quickly as you expected, perhaps only several thousands. At this point, you will want to increase your regular investment amount, such as to $500 or $1000 per month.
My current approach is to invest at least 60% of my income into VOO and QQQ each month, and invest all year-end and performance bonuses. If there is a salary increase, the additional amount will also be invested. I then maintain my current spending level. By continuously increasing the investment amount, the speed at which money grows faster and faster, and seeing the balance of the investment account later, also gives me a sense of accomplishment.
The simplest and perhaps the most foolproof way, and is also the easiest investment you’ll ever make in your lifetime
The simplest and perhaps the most foolproof way to achieve financial freedom is also the easiest investment you’ll ever make in your lifetime: continuous investment in VOO and QQQ.
If you see the long-term trend of VOO and QQQ, they are still growing, no reason to hold them very short time:
So, you don’t need to spend hours researching individual stocks, analyzing market trends, or seeking validation from so-called “expert investors” on platforms like Raddit, IG, or Tic-tok. By focusing on holding these ETFs, you can outperform 80% of investors with minimal effort. Instead, you can use the extra time to pursue your passions and interests.
As for me, I’m using this extra time to share these thoughts with you.
Furthermore, this strategy is so simple that even your grandparents could do it. So why wouldn’t you?
Remember, time is your most valuable asset, and investing should only take up a fraction of it, less than a millionth of your time in a year.
Conclusion
In conclusion, investing in VOO and QQQ has not only secured my future but has also been the simplest and easiest investment goal I’ve encountered in my lifetime.
Of course, the desire to accumulate more wealth may lead to increasing investment amounts over time, driven by a sense of insecurity. This accelerates the compounding of wealth.
So, achieving financial freedom with VOO and QQQ, from the perspective of securing future livelihoods, is indeed feasible. However, becoming a millionaire or billionaire is a more challenging endeavor!