Short blog series (part68) Investing basics (ETFs, stocks, crypto-lite)

Invest mainly in low-cost broad ETFs, treat individual stocks as optional side bets, keep crypto tiny and speculative, and let time—not hype—do the heavy lifting.

Investing is basically:

Putting money to work now so Future You has more options later.

Core principles that matter more than any hot pick:

• Time in the market > timing the market

• Diversification reduces risk

• Consistency beats cleverness

• Low fees matter a LOT

1. ETFs (the best place to start)

ETF = Exchange-Traded Fund

Think of an ETF like a basket of investments you buy all at once.

Why ETFs are beginner-friendly

• Instant diversification (hundreds or thousands of companies)

• Lower risk than picking single stocks

• Low fees

• Minimal effort

Common ETF types

• Total market ETFs

  • Own everything (or close to it)

  • Example: US stock market, global market

• S&P 500 ETFs

  • Top 500 US companies

  • Historically strong long-term returns

• Bond ETFs

  • Less volatile, lower returns

  • Help stabilize a portfolio

• Sector ETFs

  • Tech, healthcare, energy, etc. (more risk)

📌 Beginner rule of thumb: Most long-term investors build their core around 1–3 broad ETFs.

2. Stocks (higher risk, higher effort)

Buying a stock = buying a slice of one company.

Pros

• Potentially higher returns

• You can invest in companies you believe in

• More engaging/fun

Cons

• Less diversified

• One bad company = real losses

• Requires research and emotional discipline

Beginner approach to stocks

• Treat them as “satellite” investments

• Example:

  • 70–90% ETFs

  • 10–30% individual stocks

📌 If a stock going down 30% would panic you → you’re overexposed.

3. Crypto-Lite (emphasis on lite)

Crypto is high risk, high volatility, but some people include a small slice.

Sensible “crypto-lite” mindset

• View it as speculative, not foundational

• Stick to large, established coins (e.g., Bitcoin, Ethereum)

• Avoid hype coins, influencers, and “guaranteed” returns

Allocation guideline

• 0–5% of your portfolio

• Only money you’re okay seeing swing wildly (or go to zero)

📌 If crypto keeps you up at night → it’s too much.

4. A Simple Starter Portfolio (example)

Not advice—just a framework:

• 70–80% Broad stock ETFs

• 10–20% Bond ETFs (optional, more stability)

• 5–15% Individual stocks

• 0–5% Crypto

You adjust based on:

• Age

• Risk tolerance

• Income stability

• Time horizon

5. How people actually win long-term

• Invest automatically (monthly > lump sums emotionally)

• Ignore daily market noise

• Rebalance once a year

• Don’t sell in panic

• Keep learning—but don’t overtrade

ETFs are supposed to simplify investing, and then suddenly there are 8,000 of them and your brain melts 🫠Let’s fix that.

The 80/20 Mindset (most important part)

A “good enough” ETF you stick with beats the “perfect” ETF you keep overthinking.

The differences between solid ETFs are usually tiny compared to:

• staying invested

• contributing regularly

• not panic-selling

So the goal is eliminate bad choices, not find the best ETF on Earth.

Step 1: Decide the job of the ETF (not the name)

Before looking at tickers, answer ONE question:

What role does this ETF play?

• Core growth (most common)

• Stability / income

• Sector bet (optional)

• International exposure

📌 If it’s a core ETF, you want it to be:

• Broad

• Boring

• Cheap

Boring = good here.

Step 2: Use the “Big 4” filter (that’s it)

Ignore everything else at first. Seriously.

1️⃣ What does it track?

Look for:

• Total market

• S&P 500

• Developed world

• Broad bonds

Avoid for now:

• “Innovative”

• “Next-gen”

• “Disruptive”

• Anything with hype words

📌 Rule: If you don’t understand what it holds in one sentence, skip it.

2️⃣ Expense ratio (fees)

This one is sneaky-important.

• Excellent: 0.00% – 0.10%

• Acceptable: up to ~0.20%

• Red flag: 0.50%+

Over decades, fees compound against you.

📌 If two ETFs are similar, pick the cheaper one and move on.

3️⃣ Size & age

You want ETFs that are:

• Large (billions in assets)

• Not brand new (ideally 5+ years old)

Why?

• Less chance of closure

• Better liquidity

• Tighter bid/ask spreads

📌 If it’s tiny or just launched, it’s a “later maybe,” not a core holding.

4️⃣ Provider reputation

Stick with the boring giants:

• Vanguard

• iShares (BlackRock)

• Schwab

• State Street

They don’t need flashy marketing because… they already won.

Step 3: The “Stop Comparing” Rule

This is where paralysis happens.

If you find 2–3 ETFs that:

• Track similar broad indexes

• Have low fees

• Are large and established

👉 Stop. Pick one.

The expected long-term difference between them is noise, not destiny.

📌 Do not:

• Compare 10-year returns obsessively

• Try to predict which index will outperform

• Wait for the “perfect entry point”

Step 4: Limit how many ETFs you’re allowed

Hard cap:

• 1–3 ETFs for a beginner

• 4–5 max unless you know why you want more

More ETFs ≠ more diversification after a point It just becomes self-inflicted complexity.

Step 5: Use a “default choice” to break ties

When stuck, use a dumb rule on purpose:

• Pick the lowest fee

• Pick the largest AUM

• Pick the one you’ve heard of

• Pick the simpler index

This is not lazy—this is decision hygiene.

Common ETF Traps (avoid these)

🚫 Chasing last year’s winners🚫 Overlapping ETFs without realizing it🚫 Thematic ETFs as core holdings🚫 Constantly tweaking allocations🚫 Waiting on certainty (it never arrives)

A simple mental shortcut

If this ETF existed 30 years ago and I bought it monthly without touching it, would I be happy today?

If yes → good enough If you’re unsure → probably not core-worthy

Investing Basics — The Bottom Line

You don’t need brilliance to invest well. You need clarity, patience, and consistency.

1️⃣ ETFs are the foundation

• Broad, low-cost ETFs do most of the heavy lifting

• They give you diversification, simplicity, and strong long-term odds

• For most people, ETFs = the core of wealth building

👉 If you do only one thing right, make it this.

2️⃣ Stocks are optional, not required

• Individual stocks can boost returns or add stress

• They require more research and emotional discipline

• Best used as a small side bet, not the main plan

👉 You don’t beat the market by owning more stocks—you beat it by sticking to a plan.

3️⃣ Crypto should be “crypto-lite”

• High risk, high volatility, uncertain long-term role

• Fine as a tiny speculative slice

• Never the foundation, never money you need

👉 If it feels exciting, it’s probably risky. Keep it small.

4️⃣ Simple beats sophisticated

• Fewer investments > many overlapping ones

• Low fees > clever strategies

• Staying invested > perfect timing

👉 Complexity mostly benefits the industry, not you.

5️⃣ The real edge is behavior

The biggest threats to returns aren’t markets—they’re:

• panic selling

• chasing hype

• constant tweaking

• waiting for certainty

The biggest advantages are:

• regular investing

• ignoring noise

• rebalancing occasionally

• letting time do the work

One-Sentence Investing Philosophy

Own the market, keep costs low, take only the risk you can live with, and don’t get in your own way.

Thanks for reading!!!!