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Brennan and Erin Schlagbaum, a couple in their 30s, achieved a remarkable feat, turning their financial journey into a success story with a net worth nearing $2 million. The couple’s simple yet effective strategy involves primarily investing in index funds, along with a calculated venture into individual stocks.
The Schlagbaums embarked on their wealth-building journey after paying off over $300,000 in debt, including a substantial $234,000 mortgage. With newfound financial freedom, they delved into investing in August 2021, emphasizing a straightforward approach that revolves around index funds.
Their stock portfolio primarily comprises three key index funds:
- Vanguard Total Stock Market Index Fund
- Vanguard Total International Stock Index Fund
- Vanguard Emerging Markets Stock Index Fund
These funds offer diversified exposure to various stocks, aligning with Brennan’s preference for broad market indexes. Remarkably, more than 95% of their stock-market investments are allocated to these three funds.
In a calculated deviation from their index fund-centric strategy, the couple allocated a small percentage of their portfolio to a single individual stock: Meta Platforms. Brennan’s thorough research, including a deep dive into Meta’s 10-K filing, informed his decision to invest in Meta stock when it dipped to $97 in October. This calculated risk, representing approximately 2.5% of their portfolio, has proven fruitful, with Meta stock’s current value nearing $300.
Brennan emphasizes the importance of comprehensive research and a long-term perspective when venturing into individual stocks. While not advocating for beginners to focus on individual stocks, he notes the potential for upside gains when approached strategically.
The couple’s portfolio also reflects a nuanced approach to risk, introducing a sliver of investment in cryptocurrencies, specifically bitcoin and ethereum. Brennan maintains a philosophy of allocating a small enough amount to risky investments like crypto to mitigate potential losses.
Diversification extends beyond traditional investments for the Schlagbaums. In line with their goal to mirror the investment strategies of the wealthy, they ventured into real estate. Brennan invested in a real estate syndication, aligning with the trio of wealth-building avenues: the stock market, business ownership, and real estate.
This passive approach to real estate aligns with Brennan’s commitment to simplicity and hands-off investing. The syndication deal allows him to participate in real estate without the active involvement required in traditional rentals, fitting seamlessly into their family’s financial plan.
As Brennan and Erin Schlagbaum continue to grow their wealth, their consistent investment strategies underscore the power of simplicity and adherence to a well-thought-out plan. The couple’s journey exemplifies the potential for financial success through disciplined and strategic investing.
In conclusion, Brennan advocates for a straightforward approach to building wealth, emphasizing that one doesn’t need to constantly switch strategies or make complex investment decisions. The Schlagbaums’ story serves as an inspiration for those seeking financial freedom through a balanced and calculated investment approach.
