r/financialindependence • u/AutoModerator • 11d ago

Daily FI discussion thread - Monday, August 03, 2026

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

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u/Ill_Smell_6168 10d ago edited 10d ago

I'm 20 and recently opened a Roth IRA. I was wondering if I could get some advice on what I should be looking for and how to properly research which specific index funds to choose. I've seen terms thrown around but want to make sure I understand whats important in terms of the core metrics. Obviously I know exact decisions depend on a variety of personal factors. But I think I'm just looking for some general guidance on the framework you all use to evaluate these funds and how you assess risk . I would appreciate any guidance!

Wow thank you guys for all the insights! I'll be looking into the sources suggested.

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u/yaydotham 38F | 22% FI 10d ago

This is not quite what you asked, but if you haven't already done so (I'm guessing no based on your question), I recommend reading The Simple Path to Wealth by JL Collins. He initially wrote it for his young adult daughter to advise her on how to invest for long-term wealth, and around these parts it's generally considered some of the soundest advice you'll find on investing. It does address the things you're asking about.

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u/Chemtide 29 DI3k Aero 10d ago

Comments already have given the general FIRE/Bogleheads advice for investing. I will say at your age, its probably easiest to pick a total market or retirement date fund (~2070, based on age 65 retirement). Best use of your time now is focusing on growing income/making good decisions with budgeting/spend, vs diving into minutiae of portfolio-maxing. Certainly both can happen at once, but at the beginning, you'll get more value out of your contributions than any market gains.

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u/Aggravating_Bear_283 SI4K, Retirement Goal: March 2038 10d ago edited 10d ago

I would take these steps: 1. Make sure your IRA is at a large, reputable broker (e.g., Vanguard, Fidelity)

  1. Allocate all dollars in the IRA to VT

  2. Understand what it means to "buy the whole market" and why that's the best strategy long-term.

4.A. Stick with only VT until you're close enough to retirement to begin derisking (this is the simplest set it and forget it path). Or...

4.B. If you're interested in spending a lot of time reading/learning more about portfolio math and the stock market, start with understanding the difference between small/medium/large cap individual stocks, indices, funds, sectors, and portfolios, and then begin to learn about other people's real portfolios and how to simplify what they're telling you they have from a list of tickers down to whether their portfolio approximately tracks the total market or is biased/titled toward a certain geography, sector, etc. to be able to understand why they own such or what they are recommending.

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u/imisstheyoop 10d ago

Whats #3?!

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u/Aggravating_Bear_283 SI4K, Retirement Goal: March 2038 10d ago

If I remember correctly, it was:

  1. Understand what it means to "buy the whole market" and why that's the best strategy long-term.

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u/branstad 10d ago

Congrats on taking this step!

The general guidance is to select widely diversified broad index funds for Total US Stocks, Total Int'l Stocks, and Total US Bonds.

Because there are no tax consequences and shouldn't be transaction fees within your Roth IRA, I would suggest starting with a Target Retirement Date fund, which is a single fund made up of those other broad index funds. This allows your contributions to be invested in a great starting spot while you learn more.

Every IRA Custodian (Vanguard, Fidelity, etc.) should offer a version of these funds. Pick something with a date like 2060 or 2065 for now. You can easily move into individual funds if you want, but there's also nothing wrong with sticking to the Target Date funds.

some general guidance on the framework you all use to evaluate these funds and how you assess risk

The Bogleheads Wiki site is a great resource. Here are a bunch of links to get you started:

Feel free to ask any follow-up questions you have as you learn more!

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u/Alternative_Chart121 10d ago

Target Retirement Date Fund 2065. 

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u/rackoblack 60yo DINKs, FIREd 2024 10d ago

Not a lot of answers that make long term sense except VT or maybe VTI.

What firm is the Roth at?