At 35, I’m finally starting my dividend portfolio with $3,000—what should I include for growth and yield?

It’s never too late to start investing. While everyone wishes they invested as teenagers, some people start in their 20s, 30s, 40s, or much later. However, it’s better to invest in assets at some point in this life than not to invest at all.

A 35-year-old recently posted in the Dividends subreddit seeking advice. The individual just got started with dividend investing and wants to invest $3,000 into various assets. The Redditor has a long-term approach and will use dollar-cost averaging to build positions.

“I’m looking for a starter portfolio mixed with dividend growth but also maybe one high yield to spice it up,” the Redditor explained.

You’re Not Too Late

The top commenter dispelled the myth that the Redditor was a late bloomer. Social media can distort reality, especially when posts about college students investing their money get a lot of engagement. While it seems like more young people are investing, the reality is much different.

The commenter explained that less than half of people in the U.S. own stocks, and that percentage is even lower in the rest of the world. The commenter then jokingly said that the original poster is still early in the game if they don’t want to retire at 40.

Seeing other people who have invested at a younger age doesn’t make you late to the party. You can start now with what you have and wait patiently for your portfolio to compound over time.

Don’t Try To Be Flashy

You don’t have to make dramatic moves with your portfolio to achieve long-term returns. In fact, it is those very moves that can lead to losses and prolong your path to long-term financial success. The commenter who suggested keeping things simple also presented the Schwab US Dividend Equity ETF (NYSEARCA:SCHD) as an option. The commenter suggested buying the ETF every month for the next 20+ years instead of doing anything more detailed.

Long-term investing beats timing the market, and most traders end up losing their money anyway. All it takes is finding a reliable ETF that has a low expense ratio and aligns with your long-term financial goals.

A Roth IRA Can Be A Great Resource

We don’t know if the Redditor has a retirement account from their employer, but you can create a Roth IRA on your own. One commenter suggested this option, and it is a great idea. Roth IRAs allow you to accumulate dividends and capital gains tax-free, and they are especially useful for dividend portfolios. High-yield stocks increase your tax burden, but Roth IRAs remove that disadvantage.

You can contribute up to $7,000 per year to a Roth IRA. However, you can make an additional $1,000 contribution each year if you are 50 years or older. The IRS periodically increases the maximum contribution you can make to a Roth IRA.

The post At 35, I’m finally starting my dividend portfolio with $3,000—what should I include for growth and yield? appeared first on 24/7 Wall St..