Last month, I made the most uncomfortable decision of my entire investing life.
I sold every single bond in my portfolio.
Yes — all of them.
No safety net. No “just in case” allocation. Gone.
Financial advisors would probably shake their heads. Conservative investors might call it reckless. But after running the numbers again and again, I realized something shocking:
👉 Bonds were quietly stealing my future.
And replacing them with just two dividend ETFs may have just pulled my retirement date five years closer.
Before you scroll away thinking this is another reckless “YOLO investing” story, let me show you exactly why I did it — and why this strategy might change how you think about retirement forever.
The Moment I Realized Bonds Were Holding Me Hostage
Like many investors, I believed bonds were “safe.”
Stable.
Predictable.
Responsible.
So I held a large chunk of my portfolio in bonds, feeling proud of my conservative allocation… until I did one uncomfortable calculation:
My bonds were barely beating inflation.
Some years, they didn’t even manage that.
At 2–3% returns (on a good year), my portfolio was growing — but painfully slowly. When I projected this forward, the result was brutal:
📉 I wouldn’t reach my retirement goal until my 70s.
That’s when it hit me.
I wasn’t being safe.
I was taking the biggest risk of all — the risk of never truly retiring.
Why Bonds Feel “Safe” — But Are More Dangerous Than You Think
Here’s the uncomfortable truth about bonds today:
Interest rate volatility has crushed bond prices
Inflation quietly eats away your purchasing power
Fixed income doesn’t grow with rising living costs
Even when bonds “perform well,” most investors are celebrating 2–3% returns — while inflation keeps marching forward.
I realized that playing it safe was costing me time, freedom, and options.
So I started looking for a better solution.
That’s when I found two dividend ETFs that completely rewired how I think about income investing.
ETF #1: SCHD — The Dividend Income Machine
The first ETF that replaced my bonds was SCHD (Schwab U.S. Dividend Equity ETF).
This isn’t a hype fund. It’s boring — and that’s exactly why it works.
Why SCHD stands out:
💰 Dividend yield: ~3.8%
💸 Expense ratio: 0.06%
🏦 Assets under management: $70+ billion
📊 Only ~100 high-quality companies
Instead of chasing risky yields, SCHD focuses on financially strong dividend payers — companies that consistently generate cash.
Think household names like:
PepsiCo
Chevron
Home Depot
AbbVie
These companies don’t disappear overnight. They pay dividends year after year — and often increase them.
👉 Result: Income that beats most bonds, with growth potential bonds simply don’t have.
Over the past 5 years, SCHD delivered around 7%+ annualized returns, while still paying reliable quarterly income.
ETF #2: VYM — The Growth Engine That Shocked Me
Then came VYM (Vanguard High Dividend Yield ETF).
This ETF did something my bonds never could.
It exploded.
📈 2025 return: ~10.65%
While SCHD had a flat year, VYM surged — proving an important lesson:
Diversification isn’t optional. It’s survival.
Why VYM is different:
🌍 Over 500 dividend-paying companies
⚖️ No single stock dominates the fund
💸 Same ultra-low expense ratio: 0.06%
📊 Strong exposure to tech, healthcare, finance, and more
Over the last 5 years, VYM delivered ~11% annualized returns.
Let that sink in.
While bonds crawled at 2–3%, VYM was compounding wealth at more than 11% per year.
That’s not a small difference.
That’s a life-changing one.
The Math That Changed Everything
Let’s make this painfully clear.
If you invested $100,000:
Bonds at ~3% → ~$116,000 after 5 years
SCHD → ~$143,000
VYM → ~$168,000
That’s tens of thousands of dollars — from one strategic shift.
And compounding doesn’t slow down.
It accelerates.
This is how retirement timelines collapse faster than you expect.
Why Dividend ETFs Beat Bonds for Early Retirement
Here’s what bonds can’t do:
1️⃣ They Don’t Grow With Inflation
Dividends can increase. Bond interest doesn’t.
2️⃣ They’re Tax-Inefficient
Bond interest is taxed as ordinary income.
Qualified dividends are often taxed at lower rates.
3️⃣ They Force You to Sell Assets
Dividend strategies let you live on income, not principal.
With SCHD’s ~3.8% yield, every $100,000 generates ~$3,800 a year — without selling a single share.
Pair that with VYM’s growth?
That’s where the magic happens.
How This Strategy Could Cut 5 Years Off Retirement
Here’s a realistic example:
Age: 35
Savings: $200,000
Annual contributions: $30,000
📉 Bond-heavy portfolio (~4% return):
→ $1 million at age 55
📈 SCHD + VYM blend (~9% return):
→ $1 million at age 50
That’s five years of freedom back.
Five years of health.
Five years of choice.
Five years you never get back.
The Risks (Because This Isn’t a Fantasy)
Let’s be honest.
These are equity ETFs — prices will fluctuate
Dividends can be reduced during severe downturns
Short-term volatility is real
But the risk I fear more than volatility?
👉 Running out of time.
Final Thoughts: Sometimes Playing Safe Is the Riskiest Move
After making this shift, I’m more confident about my retirement than ever before.
Not because returns are guaranteed — but because my portfolio is finally working for me.
Bonds didn’t fail because they’re bad.
They failed because they weren’t enough.
If you’re tired of watching inflation eat your future while your retirement date drifts further away, SCHD and VYM deserve a serious look.
🚀 Ready to Invest in These ETFs?
If you want an easy, low-cost way to invest in SCHD, VYM, and other global ETFs, you can do it through moomoo — a powerful investing platform with real-time data, smart tools, and competitive fees.
👉 Open your moomoo account here:
🔗 https://j.moomoo.com/0xFRE4
(Not financial advice. Do your own research before investing.)
Which would you choose?
💰 SCHD for steady income
📈 VYM for long-term growth
Or a mix of both?
Drop your thoughts — and share this with someone who still thinks bonds are “safe.” 🔥📊
