100 Minus Age Rule Explained Using ETFs

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One of the most common portfolio construction rules used by financial advisors is the 100 minus age rule. It is a simple framework designed to help investors decide how much of their portfolio should be allocated to stocks versus bonds based on age and risk tolerance.

In this video, The ETF Investor explains how the 100 minus age rule works, why advisors have used it for decades, and how you can apply it using low cost ETFs. We walk through real examples at different ages and show how ETFs like VOO, VTI, BND, VGSH, SCHD, and VTIP can be combined to build balanced portfolios over time.

The idea behind the rule is straightforward. Younger investors typically have more time to recover from market downturns and can afford to hold more volatile growth assets. As investors get older, the framework gradually shifts toward stability and capital preservation through fixed income ETFs.

We also discuss modern variations like the 110 minus age and 120 minus age rules, which reflect longer life expectancies and changing market dynamics. These updated models often allow for higher equity exposure while still maintaining a disciplined approach to risk.

This video is designed for investors who want a simple starting point for asset allocation without overcomplicating their portfolio. Whether you are just getting started or refining an existing strategy, understanding this framework can help you think more clearly about risk, diversification, and long term investing.

Comment your age below and I will reply with a sample ETF portfolio to consider based on this approach.

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This video is for educational purposes only and does not constitute financial advice. Always consult a qualified financial professional before making any investment decisions.

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