High-Income Earner With $3,000+ Monthly To Invest Faces Big Decision – 'I Definitely Want To Diversify' Beyond AI And Dividends - Vanguard Total International Stock ETF (NASDAQ:VXUS)

Diversification is the foundation of sound investing, often described as the only “free launch” in finance. By spreading investments across various assets and sectors, investors can mitigate risk and grow their money at the same time.

Enter the world of ETFs, which are a great way to achieve diversification. Broad-market ETFs like Vanguard S&P 500 ETF VOO and Vanguard Total Stock Market ETF VTI offer exposure to a wide range of companies, while sector-specific or dividend-oriented ETFs like Schwab U.S. Dividend Equity ETF SCHD provide more targeted strategies. The key is to align investments with long-term goals, tax considerations, and risk tolerance.

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In a recent Reddit post, a high-income earner shared his financial circumstance and sought advice on how to invest a considerable amount of money. The poster has maxed out his tax-advantaged accounts, holds $75,000 in VOO, and now has an additional $150,000 to put into the market, along with the ability to contribute $3,000 or more per month. His goal is to retire in 20 years, so he wants to diversify beyond his current holdings.

“I definitely want to diversify. I think the AI/Mag7 are due for a correction. I want to have some [ex-U.S.] investments as well. We can invest $3,000+ each month, so we’re slow and steady, not trying to moonshot anything. But ~20 years is when we want to retire (quite a lot younger than average),” he wrote.

The investor’s main question was how to allocate his windfall and what monthly contributions he and his wife should make to achieve long-term growth while keeping risks low and avoiding unnecessary taxes. The Reddit community has shared insights and suggestions in the comments, so let’s analyze them.

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Where Should the Investor Allocate $150,000 and $3,000/Monthly? Redditors Share Insights

Stick with Broad-Market ETFs for Long-Term Growth

Many users suggested doubling down on broad-market ETFs like VOO, pointing out their simplicity, diversification, and historical performance.

“20 years? Yeah, dude, I'm a certified SCHD cult member and I would still go 100% VOO,” a Redditor said.

“This is the only answer. More VOO,” a comment reads.

A Reddit user mentioned that while SCHD is his favorite ETF, he recommends VOO because he’s certain it will surpass SCHD in the long run.

“I mean, SCHD is my favorite ETF, but my opinion is that VOO will outperform it over a 20-year period, and with far fewer tax implications. You obviously can just buy dividend-paying funds at or near retirement, especially if you prefer dividends and not selling stocks over the usual 4% rule,” he said.

A commenter also recommended the poster invest in VOO because broader diversification might complicate the whole investing journey.

“$150,000 of VOO. Don’t overcomplicate it,” he wrote.

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Add International Exposure and Alternative Assets

Several community members advised the poster to diversify beyond the U.S. market by adding international ETFs or alternative assets to his portfolio.

“Here’s what I’d do: put 63% in VTI, put 27% in [Vanguard Total International Stock ETF VXUS, put 7% in [WisdomTree Floating Rate Treasury Fund USFR], put 3% in Bitcoin,” a Redditor suggested.

“If I'm managing someone else's money for 30 years, I'm probably doing something like: 60% VTI, 10% [Berkshire Hathaway Inc. Class B (NYSE: BRK-B)], 30% VXUS,” a comment reads.

A Redditor recommended allocating a portion of the portfolio to VXUS and BRK.B to diversify while minimizing risks.

“If you're looking at diversifying from what you have, you can add some VXUS (underperformed for decades but that might be changing?). BRK.B is basically a value ETF. You already hold a decent amount of it in VOO, but nothing wrong with adding a bit more Berkshire,” he wrote.

“BRK.B has been beating [SPDR S&P 500 ETF Trust SPY],” another comment says.

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