Shortcut: The Easiest Way to Start Investing for Retirement

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Image showing the simplified process of investing. Open broker account, buy etf, auto invest!

Why the "Shortcut" Exists

You want to grow wealth for retirement but don’t have time to micromanage markets? Enter Vanguard Diversified High Growth ETF (VDHG). One trade = 9,500 underlying holdings (global shares + bonds) at a small 0.27% pa managment fee. Buy, automate, go live life.

Pair it with Dollar Cost Averaging (DCA) for a match made in heaven.

Know the Risks

  • Market risk: equities can fall 30–50 % in a crash, stay the course
  • Currency risk: unhedged global assets rise/fall with the AU currency
  • Provider risk: Vanguard keeps the sub-register (not CHESS sponsored)
  • Sequence risk: big draw-downs right before retirement hurt, shift to cash/bonds as the date approaches

The 5-Step Playbook

2. Put asside enough savings for an Emergency Fund

General advice is 3 months worth of expenses into a High Interest Savings account that can be accessed without hesitation if needed.

3. Buy VDHG

Place a market or limit order and grab as many units as you can comfortably afford.

Key Assumptions

  • You're at least 10 years from retirement
  • Comfortable with short-term volatility for long-term growth
  • Contributions Continue Over Time, especially when the market is in a downturn
  • Dividends are Reinvested

Pros & Cons

✅ Pros❌ Cons / Trade-offs
One decision, zero rebalancing Asset mix baked-in (10 % bonds, heavy AU bias)
Ultra-diversified (~9,500 holdings) Dividends distribute quarterly, which is less tax-efficient than accumulation funds
Low annual fee (0.27%), or $67.5pa on a $25k balance Units aren’t CHESS-sponsored (tiny but non-zero counter-party risk)
Tax-efficient ETF structure, franked dividends Further diversification (REITs, crypto) not included

FAQ (click to expand)

Can I skip the bonds and heavy Aussie exposure?

Yes. That’s the topic of Personalised Path — building your own ETF mix to match your desired allocations.

Where do crypto, REITs, or individual stocks fit?

Those live in Custom Route. They can add diversification (and volatility) once you’re comfortable with core index funds.

Should I turn on a Dividend Reinvestment Plan?

If you're in accumulation mode, auto-reinvesting keeps your money working and avoids decision fatigue. Alternatively, pool the cash and buy more units manually each quarter.

Alternate approaches?

  1. Instead of VDHG invest in DHHF. DHHF could provide higher long-term growth, since it’s 100% equities with no bond allocation, maximizing returns in rising markets. Additionally, it has lower fees (0.19% vs. 0.27%), meaning more of your money stays invested rather than going toward management costs.
  2. Personalised Path: How to Build a Diversified Portfolio & Manage It Over Time
  3. Custom Route: Designing Your Own Investment Strategy Beyond ETFs (coming soon)
  4. Gold, is it the ultimate investment?

 This blog provides educational information only and does not constitute financial advice. Seek independent financial guidance before making decisions. The author is not responsible for any losses from reliance on this content.

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