Change is a dirty word for many people.
Just the thought of change can leave you with a queasy feeling in your stomach and increased stress, and unfortunately this results in the avoidance of change. Many people–myself included–are creatures of habit and would rather stay with what we know.
Stay where we are comfortable.
There is nothing necessarily wrong with that, but change can also be very positive and open doors that you never thought would be possible had you stayed in the bubble of familiarity and comfort.
Year of Change
Personally, 2018 has been a year of change on many fronts.
Some of the change was involuntary, such as being in a position to need a new job due to layoffs; while some of the change has been entirely voluntary, such as deciding to initiate a new dividend growth portfolio and start this blog.
Fortunately, everything has worked out quite well thus far (knock on wood).
Prior to my end date at my former employer, I had already lined up a new job and negotiated a start date that allowed me to take a few weeks off to decompress.
The time to relax allowed me more time to read and complete due diligence on getting started with dividend investing. And a positive aspect of being laid off was that my severance package afforded me increased capital to kick-start my DGI portfolio.
While I am definitely happy with how things have worked out, I will say that there were times that it wasn’t easy or that the fears of change did not rear their head.
But the experience has allowed me to look at change a little differently, and more openly.
If you’ve read my about page, you will know that I’ve been a pretty staunch believer in index funds (and if you haven’t read it, go do so now).
So much so that when I started this new portfolio, the first thing I bought was more VTSAX.
But as I shared my purchases in the June Dividend Income Report, I recognized that my automated deposit of funds to buy more VTSAX was being done from the perspective of that bubble of familiarity.
Don’t get me wrong. I love VTSAX and own quite a bit in my retirement accounts, as well as a handful of other index funds.
But is it the best choice for a dividend focused portfolio? Nope.
Recognizing that my rationale for setting up the automated transaction to buy VTSAX every month was largely a result of keeping with my habits, I’ve decided to change that transaction.
While it will require more manual effort, I have changed that recurring deposit to go into the money market fund and I will purchase more of VYM manually.
Can a Leopard Change Its Spots?
Some might look at the change from an index fund to an ETF as inconsequential and think of the phrase that a leopard cannot change its spots, or that one really cannot change who they are.
There is some truth to that, as I will say that my rationale for building a position in VYM has some basis in wanting to be more broadly diversified than only holding the individual dividend stocks that I’ve selected as part of my portfolio.
That diversification, while I think is wise, is also a hedge against the fear of change.
Fear of the unknown.
Fear that I am making a mistake and the stocks I select will crater.
To that I would say that I value the diversification that VYM offers to my portfolio, and ultimately that my decision to hold VYM at all is not from a place of fearing change but rather from a place of desiring a broader scope of dividend paying companies than I can buy individually while still maintaining a nice dividend yield.
I am still a believer of index funds and continue to invest through my retirement accounts. However, I’ve learned to appreciate that change can be extremely positive and I should not be afraid to change course.
What do you think about this change from VTSAX to VYM?
How have you approached change in your life?