After writing about career development and book lists, I’ve been thinking a lot about another crucial aspect of life: personal finance. For many, the stock market seems like a complicated beast, a casino where you need to be an expert to win. For years, I felt the same way, dabbling in individual stocks with mixed (and often stressful) results. Then I discovered the beauty of passive index fund investing, specifically through an ETF called VOO.

VOO is the Vanguard S&P 500 ETF. In simple terms, when you buy a share of VOO, you’re buying a tiny piece of 500 of the largest publicly-traded companies in the United States. Think Apple, Microsoft, Amazon, and so on. You’re not betting on one company; you’re betting on the American economy as a whole to grow over the long term.

Why a Simple ETF like VOO?

  1. Diversification: It’s the old saying, “Don’t put all your eggs in one basket.” With one purchase, your investment is spread across hundreds of companies in various sectors.
  2. Low Cost: VOO has a very low expense ratio (around 0.03% as of writing). This means more of your money is working for you, not going to management fees.
  3. Proven Track Record: While past performance is no guarantee of future results, the S&P 500 has historically delivered solid returns over the long run. Warren Buffett himself has famously recommended a low-cost S&P 500 index fund for the majority of investors.

So, that’s my take. Investing doesn’t have to be a source of stress. For me, a simple, low-cost ETF like VOO provides a straightforward path to building long-term wealth while allowing me to focus on what truly matters.