Here's something that should annoy you: the two most boring things I own are my biggest winners.
Two ETFs that have never once made me feel a thing — quietly up more than anything else in my account. Meanwhile, the exciting stock everybody asks me about? Deep in the red as I write this.
That contrast is the whole point of this post. After 35 years of investing — I bought my first mutual fund at 15 with nobody handing me money — I've learned that the boring stuff is what actually builds wealth.
And you don't need 10 ETFs to do it. You need three buckets, and you pick one from each.
Quick disclaimer before we go any further: I'm not a financial advisor, and this isn't investing advice. I'm showing you how I think about my own money today — and "today" matters, because this changes as I get older and as the market moves. Do your own research.
You Don't Need 10 ETFs. You Need 3 Buckets.
Everyone online shows you these "buy and hold forever" lists with 10 tickers on them. The problem? Half of them own the same underlying stocks.
You think you're diversified, but you're really just paying three different fund managers to buy you the same companies.
The simpler way to think about it is in three buckets, each with a specific job:
- Bucket 1 — Growth: your wealth builder.
- Bucket 2 — Dividend Growth: pays you now, raises the payment over time.
- Bucket 3 — High Income: bigger monthly cash flow, less upside.
Pick one fund from each bucket and you've got a real portfolio. That's it. Everything past that is fine-tuning.
ETFs Are the House. Individual Stocks Are the Renovations.
Here's the mental model I keep coming back to. ETFs are the house — the foundation, the frame, the structure. Individual stocks are the renovations — the fancy kitchen, the finished basement.
You don't build a house out of renovations. You pour the foundation first, then you get to have fun. Most people do this backwards: they buy 10 exciting individual stocks and call it a portfolio.
That's not a house. That's a pile of renovations sitting in an empty field.
In my own brokerage account, my ETF core is about 60% and individual stocks are about 40%. And if you're just starting out, you honestly don't even need the 40%. You can build serious wealth with nothing but the three buckets.
Bucket 1: Growth
This is your wealth builder. Low dividend or no dividend — you're not here for income, you're here for the price to climb over 10, 20, 30 years.
If you want to keep it dead simple, this bucket can be a single fund: VOO for the S&P 500, or QQQ for the Nasdaq 100. The rule here is straightforward — the younger you are, the heavier you go in this bucket.
If you're in your 20s, this should be most of your portfolio. Time is the one advantage you have that I don't, so use it. Growth needs decades to do its thing, and you've got the decades.
In my account, this bucket is VOO, SCHG, VGT, and a smaller value play in AVUV — roughly 20% of my ETF core. That's deliberately not huge, and I'll explain why in a minute.
Bucket 2: Dividend Growth
This bucket pays you now and raises the payment almost every year. The yield today is modest, but here's what people miss: it's not about the yield today, it's about the yield on what you paid.
Hold a fund like this for 15 or 20 years while it keeps raising the dividend, and your income on your original money gets serious.
Beginner version: SCHD, VIG, or FDVV — pick one.
In my account this is SCHD and DGRW, about 27% of the core — bigger than my growth bucket. SCHD is actually my single largest position in the entire account. Boring on purpose.
And remember the boring winner from the intro? That's the one. The income shows up and it appreciated. That's the strategy working quietly while nobody pays attention.
Bucket 3: High Income
These are covered-call ETFs.
They pay you monthly, and the yields are big — but there's a trade: you give up some upside to get that income. The fund is selling away part of its growth in exchange for cash today.
So this is not where a young person should park money. It's for when you actually want the cash flow.
Beginner version: JEPI, QQQI, DIVO, or SPYI — just understand what you're trading away.
In my account this bucket is DIVO, QQQI, JEPI, and JEPQ — about 12% of the core. Different funds, same job: they pay me every single month no matter what the market is doing.
Why I Tilt Toward Income as I Approach 50
So why am I — turning 50 this year — leaning toward income instead of going all-in on growth like I'd tell a 20-year-old to do?
One word: balance.
I'm an entrepreneur. I run multiple businesses, and I recently launched a brand-new one — a men's beauty brand called GLZD. First shipment, thousands of units, out in the world. And I'll be honest: I don't know yet if it works. That's real risk — my money and my time on a bet that hasn't paid off yet.
When one entire side of your life is high-risk, the other side has to be the ballast. My portfolio is not where I go looking for excitement — I get plenty of that at work.
My stocks are the boring, stable, cash-producing counterweight to the risk I already carry as an operator. Dividend-paying companies tend to be the grown-up, profitable, stable businesses, and that stability balances out everything else in my financial life.
I've also taken a real business loss before — I had a company fail years back and lost almost everything. So I'm not theorizing about risk. I've eaten it. For the last eight years I poured profits into real estate; now I'm shifting toward something more passive and more liquid — stocks and ETFs that pay me — because I don't want all my money locked up in buildings.
When I Actually Buy Individual Stocks
So when do I buy an individual stock instead of just adding to the buckets? Only when I see something I genuinely believe in. If I don't see anything I love, I don't force it — I just buy more SCHD or SCHG and move on. There's no pressure to be a genius every week.
Two quick examples of how that plays out:
SOFI — the one everybody asks about. As I write this, it's showing a five-figure paper loss in my account. And I'm not selling. I'm doing the opposite: dollar-cost averaging, buying more, bringing my average cost down, because I believe in where it goes over the next year or two. When you believe in the long-term story, a red number isn't a reason to panic — it's a sale. Most people sell the dip and buy the hype. I try to do the reverse.
SCCO (Southern Copper) — I bought this after listening to a podcast about how many data centers are going to get built in the coming years and the raw materials it'll take. Copper sits right at the center of that. I did the research, took the swing, and held it — and it's been a winner. That's what an individual stock should be: a thought-out bet, not a coin flip.
How Your Buckets Should Shift as You Age
Pull it all together and the framework is simple:
- Younger? Go heavy on Bucket 1 (Growth). You've got time — let it compound and don't overthink it.
- Older? Start shifting weight toward Buckets 2 and 3 for income and stability. That's exactly the move I'm making as I head into 50.
And here's where my head is at right now — which will probably change, and that's the point. I actually want to buy more of those dividend ETFs. But I think they're expensive at the moment, so I'm being patient and waiting for a pullback before I add.
I'm not chasing. I'd rather sit on my hands than overpay.
The Bottom Line
Three buckets. Pick one from each to start. Let the boring foundation do the heavy lifting, and add the fun stuff only once the house is solid. That's the entire system — and it's the same one quietly producing my biggest winners while the exciting bets get all the attention.
Frequently Asked Questions
What are the three buckets in a 3-bucket portfolio?
Growth (wealth builders like VOO or QQQ), Dividend Growth (funds that pay and raise their dividend, like SCHD), and High Income (covered-call ETFs that pay monthly, like JEPI or QQQI). You pick one fund from each bucket.
How should I split my money between the three buckets?
It depends on your age and goals. Younger investors generally weight heavily toward Growth because they have decades for it to compound. As you get closer to needing income, you shift more toward Dividend Growth and High Income for cash flow and stability.
Should beginners buy ETFs or individual stocks first?
ETFs first. Think of ETFs as the foundation of the house and individual stocks as the renovations — you build the structure before you add the extras. You can build real wealth with just the three ETF buckets and never touch an individual stock.
Why hold dividend ETFs instead of just growth funds?
For balance. If you carry a lot of risk elsewhere in your life — like running a business — dividend-paying funds act as a stable, cash-producing counterweight. They pay you regardless of which direction the market moves.
Want to watch this play out in real time? I'm documenting my real portfolio, my wins, my mistakes, and building a new brand in public over on my YouTube channel. Subscribe so you can follow along.