What index funds do FIRE investors use?

Commonly a US total market fund such as VTI, an international fund such as VXUS, and sometimes a bond fund such as BND, or a single global fund such as VT.

Is VOO or VTI better?

They perform very similarly. VOO holds the 500 largest US companies; VTI adds mid and small caps for nearly the whole US market. Both cost 0.03% a year.

Index Fund Investing for FIRE: The Simple Portfolio Explained

Most people pursuing FIRE invest in a small number of low-cost, broadly diversified index funds, often just two or three, because they're cheap, tax-efficient and have beaten the majority of actively managed funds over the long run. A typical portfolio is a US total market fund, an international fund, and optionally a bond fund.

Why index funds

Low cost. Broad index ETFs charge as little as 0.03% a year: $3 per $10,000 invested. Many active funds charge 0.5% to 1%, which compounds into a large difference over decades.
Hard to beat. S&P's long-running SPIVA reports consistently find that the large majority of active US stock funds trail their benchmark over 10- and 15-year periods.
Diversified. One fund can hold thousands of companies, so no single failure can sink you.
Simple. Fewer decisions means fewer chances to make an expensive emotional mistake.

Popular building blocks

US total market: VTI or ITOT hold nearly every US public company.
S&P 500: VOO or SPY hold the 500 largest; performance is very close to the total market.
International: VXUS covers developed and emerging markets outside the US.
Whole world in one fund: VT combines US and international.
Bonds: BND holds the broad US investment-grade bond market.
Dividend-focused: SCHD and VIG for investors who prefer dividend payers.

Compare expense ratios, yields and returns across the full list on the ETFs page.

Sample portfolios

One fund: 100% VT. Global diversification with zero maintenance.
Two fund: 80% VTI, 20% VXUS. A US tilt with international exposure.
Three fund: 60% VTI, 25% VXUS, 15% BND. Adds bonds to soften drawdowns as retirement gets close.

These are illustrations, not recommendations. The right stock/bond mix depends on how many years until you need the money and how you'll react to a 40% decline, which stock markets have delivered several times.

Where to hold them

Fill tax-advantaged accounts first: at least enough 401(k) to get any employer match, then an HSA if eligible, a Roth or traditional IRA, the rest of the 401(k), and finally a taxable brokerage account. Early retirees often deliberately build a taxable account too, since it's the easiest money to reach before 59½.

The hard part

The strategy is simple; sticking with it isn't. The investors who do best tend to automate monthly contributions, rebalance once a year, and avoid selling in downturns.

Project what steady investing could grow to with the compound interest calculator.

Index fund investing for FIRE