Sun Feb 09 2025, by Tyler Gardner

Investing Your First $1,000

Here's exactly how I would invest my first $1,000 as a former portfolio manager.

Step 1: Open a Roth IRA

Start by opening a Roth IRA.

Step 2: Invest in S&P 500 ETF

Next, I would invest 50% of the money into an S&P 500 ETF. The S&P has not only averaged over 7% per year in real terms, but it's the foundation of almost every great investor's portfolio, whether they admit it or not.

Step 3: High-Growth Satellites

Then, I'd invest 30% into what are known as high-growth satellites, like a tech-heavy ETF. Tech has historically outperformed the broader market, but it is more volatile and carries more risk.

Step 4: Shoot for the Moon

Finally, I'd shoot for the moon with the remaining 20%. I'd put it in either a small-cap ETF, an emerging markets ETF, or just invest it in single equities that I thought would crush it. Why? Because smaller companies and emerging markets historically have higher growth rates over the long term.

Step 5: Benefits of This Investment Mix

With this mix, I get broad market exposure, low cost, and it's all intelligently placed in a Roth IRA. And I'm young, most likely in a low tax bracket, and can take advantage of decades of my gains growing 100% tax-free.

If any of this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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