The Short Answer
Buy an all-world index ETF through a low-cost broker. Set up automatic monthly investments. Done.
That's it. That's the strategy that beats 90% of professional fund managers over the long term. Not because it's clever, but because it's simple, cheap, and removes the human tendency to make emotional mistakes.
If you want to understand why this works, keep reading. If you just want to start, jump to our step-by-step guide.
Why All-World Index Funds
An all-world index fund owns a small piece of every major publicly traded company on Earth. We're talking 3,000+ companies across every sector: technology, healthcare, energy, finance, consumer goods, everything. Every country: US, Europe, Japan, emerging markets, all of it.
Why does this matter?
Diversification without effort. When one sector crashes, others often hold steady or rise. When one country's economy struggles, others compensate. You don't need to guess which industry or region will outperform. You own them all.
Historical returns. The global stock market has returned roughly 7-10% annually over the long term, after inflation. Not every year—some years you lose 30%, others you gain 25%—but averaged over decades, that's the track record. No savings account, no bonds, no real estate comes close to this long-term average.
Why not pick individual stocks? Because you're not smarter than the market. That sounds harsh, but here's the data: over 15-year periods, roughly 90% of professional fund managers—people who do this full-time with teams of analysts—fail to beat a simple index fund. If the professionals can't do it, why would you?
The stock pickers who beat the market are mostly lucky, not skilled. And you can't tell the difference until it's too late.
Index funds don't try to beat the market. They are the market. And that's exactly why they win.
Recommended ETFs
Here are specific funds to look at. These are examples as of 2026—verify current options and expense ratios before investing.
For US Investors
VT (Vanguard Total World Stock ETF)
- Covers entire global stock market (~9,000 stocks)
- Expense ratio: ~0.07% (you pay $7 per $10,000 invested per year)
- Available at any US brokerage
Alternative: VXUS + VTI (international + US separately) gives the same exposure with slightly more control over allocation.
For EU Investors
VWCE (Vanguard FTSE All-World UCITS ETF)
- Covers global developed + emerging markets (~3,700 stocks)
- Expense ratio: ~0.22%
- Accumulating version (dividends auto-reinvested)
- Available on most European brokers
Alternative: IWDA + EMIM (iShares developed + emerging markets) is another solid combination.
Accumulating vs. Distributing
EU investors have a choice: accumulating funds automatically reinvest dividends, while distributing funds pay dividends to your account as cash.
For building wealth toward FIRE, accumulating is usually better—you avoid the hassle of reinvesting dividends manually, and in many EU countries, it's more tax-efficient until you start withdrawing.
Note: Tax laws vary by country. If you're dealing with large amounts, consult a tax professional in your jurisdiction.
Trusted Brokerages
A good broker should be: cheap (low or zero trading fees), reputable (won't disappear with your money), and convenient (automatic investing, fractional shares).
US Brokerages
| Broker | Trading Fees | Notes |
|---|---|---|
| Vanguard | $0 for Vanguard ETFs | The original low-cost pioneer. Investor-owned structure. |
| Fidelity | $0 | Excellent all-around. Fractional shares. Great customer service. |
| Schwab | $0 | Full-featured. Good for checking/brokerage combo. |
All three are massive, established institutions regulated by the SEC and SIPC-insured. Your money is safe. Pick whichever has the interface you like.
EU Brokerages
| Broker | Trading Fees | Notes |
|---|---|---|
| Trade Republic | €1 per trade | German. Clean app. Automated savings plans at €0. |
| DEGIRO | €0 for core ETFs | Dutch. Wide selection. More complex interface. |
| Interactive Brokers | €1.25 min | US-based, EU-regulated. Pro-level features. Best for larger portfolios. |
For beginners in the EU, Trade Republic's savings plan feature is hard to beat—you can set up automatic monthly investments with zero transaction fees.
What to Look For
- Low fees: €0-1 per trade, no account maintenance fees
- Fractional shares: Lets you invest exact amounts (€200/month) instead of buying whole shares
- Automatic investing: Set it and forget it—money moves on schedule
- Regulation: SEC/FINRA (US) or BaFin/FCA/equivalent (EU)
The Power of Consistency
Here's the uncomfortable truth: when you invest matters far less than whether you invest consistently.
People obsess over timing. "Should I wait for a dip?" "Is the market overvalued?" "What about the recession everyone's predicting?"
Stop. You can't time the market. Nobody can—not consistently. Studies show that even professional traders fail at this. The market has predicted nine of the last five recessions.
Dollar-cost averaging is the antidote to timing anxiety. You invest the same amount every month regardless of what the market is doing. When prices are high, you buy fewer shares. When prices are low, you buy more shares. Over time, this averages out to a reasonable price and—more importantly—removes emotion from the equation.
Example: You invest €200 every month for 20 years at 7% average annual return.
- Total contributed: €48,000
- Portfolio value after 20 years: ~€104,000
- Your money more than doubled, just by showing up every month
Play with the numbers in our retirement projector →
Compound growth is not exciting in year one. Or year five. But somewhere around year ten, the curve starts bending upward in a way that feels almost unfair. That's the magic—but only if you stay consistent long enough to see it.
Common Questions
What if the market crashes after I invest?
Market crashes are normal and temporary. Since 1950, the global stock market has recovered from every single crash. The 2008 financial crisis? Recovered. The 2020 COVID crash? Recovered in months. If you're investing monthly, crashes actually help you—you're buying more shares at lower prices. The only people who lose in crashes are those who panic sell.
Should I wait for a dip before investing?
No. This is called "timing the market" and it doesn't work. Studies consistently show that investing immediately beats waiting for dips—because while you wait, you miss gains. The market spends more time going up than going down. Time in the market beats timing the market.
Is my amount too small to start?
No. Many brokers support fractional shares—you can buy a piece of an ETF for as little as $1 or €1. The amount matters less than building the habit. Start with €10/month if that's what you have. You can increase later. We wrote a whole guide on starting small.
What about bonds? Real estate? Crypto?
Bonds: useful when you're close to retirement for stability, but drag on returns during accumulation phase. Real estate: fine if you want to be a landlord, but index funds are simpler. Crypto: speculative, not investing—only put in what you can afford to lose entirely. For building wealth toward FIRE, all-world stock ETFs are the core. Everything else is optional.
What's the difference between accumulating and distributing ETFs?
Accumulating ETFs automatically reinvest dividends back into the fund—your share value grows. Distributing ETFs pay dividends to your account as cash—you then decide what to do with it. For EU investors building wealth, accumulating is usually more convenient and tax-efficient.
Investing isn't complicated. The financial industry wants you to think it is—complex products mean higher fees. But the evidence is overwhelming: simple, low-cost index funds beat the vast majority of expensive, actively managed alternatives.
Pick an all-world ETF. Pick a cheap broker. Set up automatic monthly investments. Then do the hardest part: nothing. Let compound growth work for decades.
Ready to take the first step?
→ How to start investing (step-by-step)
→ Calculate your FIRE number
→ Project your retirement savings