[Daisy]

JJ Colin’s simple path to wealth suggests VTI. But I was wondering how many would instead put everything into VOO (S&P 500).

These 500 companies are what moves the US and the world pretty much and with AI, these would be huge beneficiaries in the next 2 decades?

Would like to know what you all think?

[Ron]

VTI. Holds 4200 stocks….15% mid-cap and 5% small-cap. Far more diverse. But still heavily weighted toward the s&ps500.

The s&p500, as you know, contains 500 huge companies (large caps).

May history shows us that large caps have been the top performing asset only 20% of the time over the last 20-yrs!

Other assets like real estate, international mkts and others have also been the top asset for 20% of the time.

So, your portfolio, whether you own VOO or VTI, going forward, will underperform over any long period.

Plus, you are taking on unnecessary risk of volatility that is unnecessary with a portfolio that only contains VOO or VTI.

[Mike]

The enemy of a great plan is the dream of a perfect plan
Either is totally fine.

Time in the market is much more impt

[Monique]

They both perform very similarly (Total is heavily weighted S&P, about 80%).

I prefer S&P 500 index bc it feels more like a strategy than investing in the entire market.

It’s what Buffett has recommended to retail investors for years, and I like the self cleansing aspect of it (board of directors shifting, adding and removing companies based on a set of criteria).

You can’t go wrong with either one, FIRE is definitely more Total Stock Market oriented, but not for me.

[Corey]

JL Collins himself has said in interviews not to overthink it and just pick VOO or VTI.

More important to actually invest instead of spending too much time deciding when they have something like 82% overlap.

[Frank]

There is no appreciable difference between those two choices. They are virtually the same and there is no way to predict which one will be sliver better than the other in the next decade.

This is true now with a variety of low-cost index funds.

TSPTW is now over a decade old and there are many similar choices today that did not exist then.

In addition, financial technology has changed, just like your smart phone.

Fidelity is now better than Vanguard and ETFs are now the preferred fund form over mutual funds.

What you really need to learn here is what Ramit Sethi talks about when he says, “we need to spend our time and energy focusing on $30,000 questions, not $3 questions.

” This is a $3 question, like the color or brand of your t-shirt.

By contrast, a $30,000 question would be failing to invest in growing funds and hoarding money in savings accounts instead, or not understanding the difference between an account and an investment.

[Rick]

VOO makes up the lions share of VTI. VTI includes far more companies but their share % of overall is small to tiny.

This means the return of VOO and VTI are very similar which you can show via a holding comparison chart.

[Scott]

VOO is a bowl of strawberries. VTI is mostly strawberries with a few blueberries in the mix, though it will still taste like strawberries.

[Michael]

People have used the S&P500 as a core holding for decades because it does make up roughly 80% of the entire U.S. stock market. There’s nothing wrong with that.

Large cap and Total market each have periods of over and under performance from the other, but over the long haul they’re basically the same.

Investing in VOO isn’t a mistake, but don’t expect a large differential over the total market, particularly when you get 2 decades out.

[Nate]

Simple plan to wealth’s guiding principles remain the same. Invest in funds and let it go.

The funds chosen were an example and not the best all end all.

[Christopher]

Either one is fine. VTI is a little more diversified. Full disclosure I own both and have been accumulating over time.

Best of luck Daisy!

[TJ]

The small cap companies have so many money losing dogs. In a higher interest rate environment, I do worry about bankruptcies.

So, I do think VOO is better.

As others have said they’re closely correlated though so we not talking about a huge difference.

[Chris]

Because of market cap weighting, they perform almost the same. It doesn’t matter what you pick.

I use both for tax loss harvesting.

[Author]

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