Why I’m Investing into Vanguard Dividend Appreciation (VIG) ETF Daily!

By the time of this article release, I have now had a daily investment into Vanguard’s Dividend Appreciation ETF (VIG), another wonderful Vanguard ETF.

The community knows I buy Vanguard’s S&P 500 (VOO) daily and Vanguard’s High Dividend Yield (VYM) weekly, so what gives?

Therefore, it’s time to break down why I’m investing into VIG daily!

Vanguard Dividend Appreciation ETF (VIG)

As you saw in my previous article, where I broke down the Vanguard ETF trifecta, VIG was on the list.

VIG is another low cost exchange traded fund (ETF), with a 0.06% expense ratio.  That means $0.60 per $1,000 that is invested.

The ETF is composed of 289 different dividend growth stocks, and here are the top 10 stocks that VIG is composed of:

If you look at this list, we are talking HIGH dividend growth for many above.  UNH raised it 14%, Microsoft stood strong at 9.7%, JPMorgan raised it 11% last time and Visa even came in rocking with a 20% dividend growth rate.  Therefore, dividend growth is high for this ETF.

The difference with VYM is just that, growth.  You will not have the highest dividend yielding stocks in this ETF.  VYM is about an even balance of yield plus growth, such as a 2.5%-3.5% dividend yield with a 6.5%-7.5% dividend growth rate, which is solid.

VIG, however, is about the later, the dividend growth.  The yield is better than the S&P 500 ETF by ~30 basis points or 0.30%.  However, as notated in the last article, the dividend growth rate is ~9%.  Therefore, in time, the yield on cost will overcome Vanguard High Dividend Yield ETF.  In addition, the growth rate over the last 5 years was also higher than the S&P 500 ETF of VOO.

I want to retire early, though.  The question may be, “how does VIG get me there?”.  It does, but it also is coming from additional savings I have that wasn’t being used.

One could argue that I am sacrificing current yield for future growth, this is true.  That I cannot deny.  However, when I am in my 50’s, yes, 50’s, the yield on cost will be higher than my yield on cost on other investments, more than likely.  Given I may not be investing that much later on, it will be critical in retirement to make sure my income is growing at a strong pace, at least out pacing any unusual rate of high or super inflation.

Here is my borrowed image from my previous article:

My daily VIG Investing Plan

Time to add to my investing strategy.  Therefore, I am investing $30 per day into VIG.  That is $150 per week, no matter what.  That does not seem like a lot BUT that is $7,800 going into an ETF that should continue to have strong growth AND passive income growth!

Therefore, when you break down my ETFs, I am doing:

    • $60/per day into Vanguard S&P 500 ETF (VOO) = $300/week or $15,600/year
    • $200/per week into Vanguard High Dividend Yield ETF (VYM) = $200/week or $10,400/year
    • $30/per day into Vanguard Dividend Appreciation ETF (VIG) = $150/week or $7,800/year
    • In total, I am investing $33,800 into Vanguard ETFs as my goal for 2023, at least trying to!

What VIG will be bringing to the table is higher dividend growth and total return, vs. VYM.  Then, when I am really (and hopefully) hitting the stride in retirement, the VIG should take off and really grow our dividend income stream in retirement.

Buying VIG daily will add a nice punch to my overall dividend stock portfolio.  Even though you could be earning a LOT on your idle cash right now, I am still, and always, looking forward to put my money to work.

What are your thoughts on the Vanguard ETF investing strategy?  What is your favorite Vanguard ETF and are you pursuing a similar investing strategy?  What do you have set up to automatically buy, no matter what the stock market is doing?  Please share below in the comment section!

As always, thank you for stopping by, good luck and happy investing!

-Lanny

9 thoughts on “Why I’m Investing into Vanguard Dividend Appreciation (VIG) ETF Daily!

  1. For the daily purchase of Vanguard ETF’s, do you have this set up for automatic investment through Vanguard? I only see the automatic purchase option for their mutual funds. Thanks

      • Hello Mr L. VIG/VYM/VOO have so much overlap and was looking for something to do with the proceeds from selling out of VDE. VFVA I have watched for some time and the manager is very good at rotating into the next thing. They were heavy in energy and are now concentrated in comm services. This fund holds the stocks I will like to hold if I wanted to monitor over 500 stocks. It is a great balance to VIG. It is like holding a very inexpensive hedge fund that will give you some alpha. Really like the nice dividend increases and the 3 year returns are top notch. Yes, it is a newer fund but I have watched it since it came out – I have been impressed.

        2022
        12/20/2022 12/22/2022 12/23/2022 12/28/2022 Quarterly 0.6757 0.6757
        9/21/2022 9/23/2022 9/26/2022 9/28/2022 Quarterly 0.5685 0.5685
        6/27/2022 6/29/2022 6/30/2022 7/5/2022 Quarterly 0.5043 0.5043
        3/17/2022 3/21/2022 3/22/2022 3/24/2022 Quarterly 0.4332 0.4332
        2021
        12/22/2021 12/27/2021 12/28/2021 12/30/2021 Quarterly 0.5659 0.5659
        9/22/2021 9/24/2021 9/27/2021 9/29/2021 Quarterly 0.4573 0.4573
        6/25/2021 6/29/2021 6/30/2021 7/2/2021 Quarterly 0.4084 0.4084
        3/18/2021 3/22/2021 3/23/2021 3/25/2021 Quarterly 0.3389 0.3389
        2020
        12/23/2020 12/24/2020 12/28/2020 12/30/2020 Quarterly 0.4828 0.4828
        9/18/2020 9/21/2020 9/22/2020 9/24/2020 Quarterly 0.3535 0.3535
        6/25/2020 6/29/2020 6/30/2020 7/2/2020 Quarterly 0.3879 0.3879
        3/19/2020 3/23/2020 3/24/2020 3/26/2020 Quarterly 0.3655 0.3655
        2019
        12/19/2019 12/20/2019 12/23/2019 12/26/2019 Quarterly 0.4985 0.4985
        9/13/2019 9/16/2019 9/17/2019 9/19/2019 Quarterly 0.4076 0.4076
        6/19/2019 6/21/2019 6/24/2019 6/26/2019 Quarterly 0.3698 0.3698
        3/20/2019 3/21/2019 3/22/2019 3/26/2019 Quarterly 0.3595 0.3595
        2018
        12/17/2018 12/19/2018 12/20/2018 12/24/2018 Quarterly 0.4266 0.4266
        9/24/2018 9/26/2018 9/27/2018 10/1/2018 Quarterly 0.3642 0.3642
        6/26/2018 6/28/2018 6/29/2018 7/3/2018 Other 0.2670 0.2670

        • Spoiler today I switched from VIG/VFVA to $75 per day to VYM after fully closing out the remaining VDE position (500 shares) that I was using for covered calls.

          Rational. Next month VIG will include AAPL and I really don’t want to own a fund that top heavy with tech (exact reason I do not want to own VOO). Especially with AAPL so reliant on suppliers in China and their consumer base. Bonus exposure to utilities when the Inflation Reduction Act starts to kick in. UNH a top position in VIG I feel is in a massive bubble and the Inflation Reduction Act will hurt their forward earnings that is not being reflected in the price yet.

  2. Very inspiring and love your way of thinking. Keep pouring the coals to it. Even though I don’t comment, I watch every video from Bert and you. Always pulling for ya! Picking up my DD mug this week 😁. Take care my man

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