Building a Portfolio for busy people
Live off the dividends, outsource the stress, and keep your time for the things that actually matter.
The vast majority of investment advice found in books, across YouTube, and throughout the financial press follows a familiar script: build a portfolio of “strong companies” with wide moats, robust business models, and stellar management.
On paper, this is excellent advice. In practice? I’m not so sure it’s applicable to the average person balancing a full-time career, a family, and a life outside of terminal screens.
Market narratives shift like sand. Bubbles form, management teams rotate, and new competitors emerge overnight. To do “fundamental analysis” correctly, you must evaluate every event, form a hypothesis, and adjust your positions in real-time. Most people simply don’t have the bandwidth for that.
Then, there is the “Technical Analysis” trap. You’re told to forget the narrative and “trade the chart” using magic indicators. But this requires a level of cold-blooded discipline that most humans aren’t wired for. It’s easy to say “cut your losses,” but much harder to do when your lizard brain asks: What if it turns around the second I sell?
The truth is that effective advice for busy people is often boring and repetitive. It doesn’t sell magazines or generate “clickbait” headlines. But it works. As Warren Buffett famously noted:
Warren Buffett “Most institutional and individual investors will find the best way to own common stock is through an index fund that charges minimal fees. Those following this path are sure to beat the net results [after fees and expenses] delivered by the great majority of investment professionals.”
Outsource your investment strategy
My perspective is shaped by my background in IT consulting. A massive portion of our industry exists because multi-billion-dollar organizations choose to outsource their initiatives.
When you ask an MBA-wielding manager at a global firm why they outsource their most innovative projects, the answer is simple: “Our business is making cars (or selling insurance, or trading commodities)—not building software. We don’t have the in-house expertise.”
They recognize that to increase the odds of success, you must seek dedicated talent. They outsource to firms that live and breathe technology 24/7.
At AMAT Investing, we apply this exact same principle. We aren’t going to pretend we can out-research a room full of analysts. Instead, we are going to outsource our investment decisions by using ETFs (Exchange Traded Funds).
How We Outsource: Passive vs. Active
By leveraging ETFs, we effectively hire full-time, focused investment experts to manage our holdings. We generally categorize these into two buckets:
Passive ETFs: These replicate a specific index (like the S&P 500). The “decisions” are made by the index rules.
Active/Thematic ETFs: The issuer rebalances the fund based on specific criteria—for example, a robotics ETF that adds or removes companies every six months to stay at the cutting edge.
Our job isn’t to pick the winning stock; our job is to research the ETF market and select the best “contractors” to build our portfolio.
Making money while sleeping
There is a second layer to this strategy: cash flow. Warren Buffett provided the ultimate motivation for this:
Warren Buffett: “If you don’t find a way to make money while you sleep, you will work until you die”.
To that, I’ll add a mantra of my own: “Make money even when you lose it.”
We achieve this by prioritizing ETFs that pay consistent dividends. A dividend is paid regardless of whether the market is bullish or bearish, or whether the Fed is raising or cutting rates. I view dividends as “the money my money makes.”
If you can reach a point where your expenses are lower than your dividend income, you have essentially secured an infinite supply of money.
Our criteria are specific: we look for funds with a yield of approximately 5% that also show positive capital appreciation. We avoid “yield traps”—those ETFs with massive payouts but shrinking share prices.
Summary
We like to keep things simple. We use ETFs to grow our capital, and we reinvest a portion of those gains into dividend-paying ETFs.
Our objective is clear: Live off the dividends, outsource the stress, and keep your time for the things that actually matter.