Your 20s and 30s represent a critical window for wealth accumulation. With decades of compounding ahead, the investment choices you make now can shape whether you reach financial independence or spend your later years playing catch-up. Building a diversified portfolio that combines traditional equity exposure with alternative assets like fractional real estate can reduce concentration risk, although diversification does not guarantee higher returns, lower losses, or superior risk-adjusted performance. This guide examines seven wealth-building investments that serve different portfolio needs, starting with mogul, a fractional real estate platform club founded by Goldman Sachs real estate alumni that reports 18.8% average annual returns across its portfolio.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
Real estate builds wealth through two channels: single-family rentals can produce ongoing gross rental yields alongside potential appreciation, but historical return comparisons with public equities vary materially depending on methodology, including leverage, operating expenses, vacancies, transaction costs, taxes, and reinvestment assumptions
Tax treatment differs by structure, not simply by asset class: depreciation may reduce current taxable rental income in a pass-through property structure, while REIT and REIT-fund distributions can consist of ordinary dividends, capital-gain distributions, or return of capital. Actual after-tax outcomes vary by property, ownership structure, distribution character, and the individual investor's tax situation
Fractional ownership reduces the upfront capital required: buying an entire investment property directly typically requires a down payment set by price and financing terms, with Fannie Mae's current eligibility matrix permitting up to 85% LTV on a one-unit investment purchase subject to underwriting. mogul lets investors build property exposure with an average investment of approximately $10,000 and without the day-to-day management demands of direct ownership
Diversification across asset classes reduces concentration risk: combining broad market ETFs with alternative investments like fractional real estate spreads exposure across return drivers, though it does not guarantee lower volatility in any given period or superior risk-adjusted returns
Fee structures matter for long-term compounding: ETFs with expense ratios as low as 0.03% preserve more capital for growth, and the SEC specifically warns that seemingly small recurring fees can materially affect portfolio value over time
Reinvested distributions contribute to compounding: reinvesting dividends and other distributions can build wealth by acquiring additional shares or interests over time. Distribution frequency alone does not increase an investment's total return; what matters is total return, the amount distributed, reinvestment timing, taxes, and fees
1. mogul
mogul delivers fractional real estate investing built on institutional expertise. Founded by Goldman Sachs real estate alumni with $10 billion in collective deal experience as of June 1, 2026, the platform brings institutional-grade property selection to individual investors seeking to build a property portfolio.
How Does mogul Work?
mogul acquires income-generating residential properties, places each into a property-specific, state-registered investment club LLC, and fractionalizes ownership into purchasable shares. In legal terms, investors purchase membership interests in the investment club LLC that owns an identifiable property rather than taking direct individual title on the deed. That structure delivers property-level economic exposure and governance rights in a specific, identifiable home rather than exposure to a blind pool of unnamed assets. Here is what the platform delivers:
Monthly net rental income: once a property is operational and generating distributable cash flow, investors receive their proportionate share of net rental income, credited monthly after applicable expenses, fees, and reserves. Amounts vary with property performance
Potential yearly tax benefits: mogul's partnership-taxed property structure generally reports to investors on Schedule K-1 and may pass through proportional depreciation allocations that can offset rental income. Whether a deduction is usable currently depends on investor-specific factors including basis, at-risk rules, and rental loss limitation rules; losses may be suspended
Appreciation potential: benefit from property value increases over an intended 3 to 10 year hold period, with 5 to 7 years typical
Governance rights: maintain voting rights proportional to your ownership percentage, with major property decisions put to a super-majority vote
Performance and Track Record
mogul reports 18.8% average annual returns (IRR) across its portfolio, with target annual returns ranging from 15% to 20% IRR. Target returns are not guarantees of future performance. The platform reports a record monthly yield of 2.6% as of June 1, 2026 on certain properties. Property-level case studies illustrate the approach: The Axelrod in Houston shows a stabilized yield of 18.0% with a projected annual return of 17.3%, while The Roman shows a stabilized yield of 17.8% with a projected annual return of 18.4%.
Institutional-Grade Selection
Less than 1% of properties reviewed pass mogul's diligence process. Research analysts and institutional partners use proprietary underwriting models to identify properties with attractive upside potential. mogul invests its own capital in every property offered, aligning management interests with investor returns.
Risk Mitigation
First $10k protection for new members: mogul covers up to $10,000 in losses for new members on investments made within the first 7 days if those investments show a loss after one year. Members can also refer a friend and receive $50 when that friend invests.
Best For: Investors seeking property-specific residential real estate exposure with institutional-style underwriting, monthly net rental distributions, and a pass-through structure whose potential tax characteristics differ from those of equity and REIT funds.
2. Vanguard Morningstar Total Stock Market ETF (VTI)
Vanguard VTI provides broad exposure to the U.S. stock market in a single, low-cost fund. Effective July 29, 2026, Vanguard added "Morningstar" to the names of its U.S. equity index funds tracking the rebranded former CRSP indexes, so the fund is now officially the Vanguard Morningstar Total Stock Market ETF. The ticker, investment objective, and management approach were unchanged. The broader fund holds approximately $2.3 trillion in total net assets, including about $663.5 billion in the VTI ETF share class as of June 30, 2026.
Core Characteristics
Broad diversification: holds 3,531 U.S. stocks as of June 30, 2026 across all market capitalizations and sectors
Ultra-low costs: a 0.03% expense ratio means just $3 annually per $10,000 invested
Daily liquidity: ETF shares trade on an exchange during any market session without lockup periods
Dividend income: 30-day SEC yield of approximately 1.03% as of July 31, 2026
Historical Performance
VTI delivered a 14.53% annualized 10-year market-price return as of July 31, 2026. According to Vanguard, the fund returned 23.71% on a market-price basis in 2024 (23.75% at NAV) and 17.10% on a market-price basis in 2025. Rolling multi-year returns change from month to month, and past performance does not guarantee future results.
Best For: Core portfolio holdings for investors prioritizing liquidity, low fees, and exposure to approximately the full investable U.S. equity market.
3. Vanguard Total International Stock ETF (VXUS)
Vanguard VXUS extends portfolio diversification beyond U.S. borders, providing exposure to developed and emerging markets worldwide.
Global Market Access
International diversification: holds more than 8,000 non-U.S. securities across developed and emerging markets
Low expense ratio: 0.05% annual cost
Higher yield: a trailing dividend yield of approximately 2.6% in late July 2026, compared with VTI's sponsor-reported 30-day SEC yield of 1.03%. Note that trailing distribution yield and 30-day SEC yield are different measures and are not directly comparable
Currency exposure: holdings denominated in multiple currencies reduce U.S.-market concentration, but also introduce foreign-exchange, country, and regional risks. Exchange-rate movements can increase losses or reduce U.S.-dollar returns
Recent Performance
VXUS gained 32.35% on a market-price basis in 2025, substantially exceeding VTI's 17.10% market-price return for the same year. Its 10-year annualized market-price return of approximately 9.95%, based on Vanguard's latest quarter-end data, trails VTI over the latest comparable window, illustrating that international markets can provide diversification benefits and can outperform or underperform across different cycles.
Best For: Investors seeking geographic diversification and exposure to international growth opportunities, who accept currency and country risk.
4. Avantis U.S. Small Cap Value ETF (AVUV)
Avantis AVUV targets small-cap stocks with value and profitability characteristics associated with historically documented return premia. Those premia are uncertain and can underperform larger growth stocks for extended periods.
Factor-Based Approach
Small-cap value focus: holds 792 securities as of June 30, 2026 selected for value and profitability characteristics
Research-informed strategy: built on academic work documenting size and value premia, which are historical observations rather than guarantees of future outperformance
Dividend yield: approximately 1.6% trailing yield in late July 2026
Moderate expense ratio: 0.25% annually
Performance Metrics
Since its September 24, 2019 inception, AVUV has delivered approximately 16.3% annualized returns through June 30, 2026. Because that period differs from VTI's trailing 10-year window, the two figures measure different time frames and are not a like-for-like comparison.
Best For: Investors with longer time horizons seeking factor exposure and willing to tolerate extended stretches of underperformance relative to the broad market.
5. Schwab U.S. Dividend Equity ETF (SCHD)
Schwab SCHD focuses on dividend-paying companies, providing both income and growth potential through a screened portfolio.
Dividend-Focused Strategy
Quality screening: the underlying index requires at least 10 consecutive years of dividend payments before applying additional fundamental screens
Attractive yield: a 3.18% 30-day SEC yield as of August 13, 2026 and a 3.13% trailing 12-month distribution yield as of July 31, 2026, above broad market averages
Low costs: 0.06% expense ratio
Concentrated portfolio: approximately 100 holdings focused on dividend quality
Income and Growth
SCHD delivered a 12.66% annualized 10-year market-price return as of July 31, 2026 while providing consistent quarterly income. The fund gained 11.67% in 2024, with dividends providing a meaningful portion of total returns.
Best For: Income-focused investors seeking dividends from companies with long payment histories alongside capital appreciation.
6. Vanguard Real Estate ETF (VNQ)
Vanguard VNQ provides liquid exposure to the listed real estate sector, primarily through Real Estate Investment Trusts (REITs).
Real Estate Exposure
Diversified property types: holds 143 real estate stocks as of June 30, 2026, spanning commercial, residential, industrial, and specialty real estate. The underlying index universe can also include real estate management and development companies, so the holdings are not exclusively pure REITs
Higher yield: approximately 3.4% to 3.5% in mid to late July 2026, depending on yield convention
Daily liquidity: unlike direct real estate, shares trade during any market session
Low expense ratio: 0.13% annually
Performance Considerations
VNQ delivered a 4.91% annualized 10-year return as of June 30, 2026 on both a NAV and market-price basis, trailing broad U.S. equities over the latest comparable period. Comparisons across different investment structures are most informative when measured over matched periods and on consistent bases, with equivalent treatment of fees and leverage.
REIT-fund distributions also carry different tax characteristics from a pass-through property interest. Much of a REIT's ordinary dividend income may be taxed as ordinary income, subject to provisions such as the Section 199A treatment of qualified REIT dividends, and distributions can also include capital-gain distributions or return of capital.
Best For: Investors wanting liquid, exchange-traded exposure to the listed real estate sector.
7. Arrived
Arrived provides fractional ownership in rental homes and vacation rentals, with a low stated minimum investment.
Platform Overview
Minimum investment: a $100 minimum initial investment
Reported scale: approximately 990,000 registered investors and $456 million total invested as of August 2026. These figures are dynamic
Liquidity mechanics: eligible individual-property shares may trade during limited monthly secondary-market windows, generally after a property is fully funded and the applicable holding requirement is met. Arrived's fund products use a separate redemption program with its own timing, limits, and conditions
Property types: both long-term rentals and vacation rentals
Return Profile
Arrived cites an estimated historical annual return range of 6% to 10% for single-family residential investments, calculated from historical housing-appreciation data and historical dividend assumptions. This is an estimated historical range rather than a current forward return target, and actual returns may vary. Arrived reported a 3.9% average annualized dividend yield for its long-term-rental properties during 2025; that figure applies to long-term rentals specifically rather than to every Arrived product. Published figures across the fractional real estate market are stated on different bases and over different measurement periods.
Best For: First-time fractional real estate investors seeking a low entry point. For a side-by-side look at how the two platforms differ, see mogul's Arrived review.
Why mogul Stands Out for Wealth-Building
Institutional Expertise Made Accessible
mogul was founded by Goldman Sachs real estate alumni whose team reports $10 billion in collective deal experience as of June 1, 2026. This institutional pedigree translates to rigorous property selection: less than 1% of reviewed properties make it onto the platform, and every property on the platform is professionally vetted and managed.
Return Potential
With 18.8% average annual returns reported across its portfolio and target IRRs of 15% to 20%, mogul aims higher than the 14.53% 10-year annualized market-price return VTI delivered through July 31, 2026. Targets are not guarantees of future performance, and the two figures are measured on different bases and over different periods. mogul uses multiple residential operating strategies, including short-term rentals, mid-term rentals, long-term rentals, and sale-leasebacks, selecting the strategy it believes offers attractive risk-adjusted returns for each property.
A Different Tax Structure From REIT Funds
mogul's property-level, partnership-taxed structure may pass through depreciation allocations on Schedule K-1 that can offset rental income for some investors, whereas REIT distributions can consist of ordinary dividends, capital-gain distributions, or return of capital. The after-tax outcome depends on the investor's basis, loss-limitation position, income level, and distribution character.
Aligned Interests
mogul invests its own capital in every property offered, so management interests track investor outcomes. Combined with the $10,000 loss protection for new members, this creates a risk-sharing structure that reflects the platform's confidence in its underwriting process.
Headache-Free Ownership
Understanding how mogul works reveals that the platform handles property management, tenant coordination, and operational responsibilities. Investors receive professionally managed, hands-off property exposure with monthly dividends, real-time appreciation, and pass-through tax reporting, without the traditional demands of direct ownership.
Investor Behavior and Platform Scale
mogul reports that 90% of its investors invest a second time, and when they do, it is 3x their first investment. As of June 1, 2026, mogul reports $90 million in assets on the platform and more than 40,000 investors.
For investors seeking property-specific residential real estate exposure, mogul combines institutional-style underwriting, property-level LLC interests, monthly net rental distributions, co-investment, and professionally managed properties. Explore available properties to see current investment opportunities, or read more about building wealth through real estate.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What is the best investment for someone in their 20s with limited capital?
There is no single best investment, and appropriate choices depend on personal risk tolerance and time horizon rather than age alone. A diversified approach combining low-cost ETFs such as VTI and VXUS with fractional real estate provides both broad market exposure and alternative asset exposure. Starting to invest in real estate with little money is now possible through fractional platforms, allowing investors to build diversified portfolios without the capital required to purchase an entire property.
How do fractional real estate platforms like mogul differ from REITs?
Fractional real estate structures vary by platform and offering. Some use property-level entities, some elect REIT treatment, and others use fund or debt structures, so tax treatment and access to depreciation vary accordingly. With mogul specifically, investors purchase membership interests in a property-specific investment club LLC that owns an identifiable home, which means they select the specific property and generally receive Schedule K-1 reporting. Publicly traded REITs, by contrast, are pooled vehicles in which investors do not choose individual properties. See mogul's overview of fractional investing for more detail.
Should I prioritize growth stocks or dividend stocks in my 20s and 30s?
Investors with long time horizons and sufficient risk tolerance may allocate more heavily to growth-oriented investments, but risk tolerance is personal and cannot be inferred from age. Dividend-paying investments like SCHD and income-generating real estate through mogul can contribute to wealth building when distributions are reinvested, though payment frequency alone does not increase total return. The key is matching investment selection to your time horizon, liquidity needs, and risk tolerance.
What are the tax implications of investing in real estate ETFs versus fractional ownership?
Real estate ETF distributions can include ordinary dividends, capital-gain distributions, and return of capital, with qualified REIT dividends potentially eligible for Section 199A treatment. A pass-through property interest such as mogul's may instead allocate depreciation on Schedule K-1, which can offset rental income subject to basis, at-risk, and loss limits. After-tax outcomes vary materially by property, structure, and taxpayer, so review the tax considerations of real estate investing with a qualified advisor.
How important is international diversification for young investors?
International exposure through VXUS provides geographic diversification that can reduce U.S.-market concentration, though it introduces currency and country risk and does not guarantee lower volatility. VXUS gained 32.35% on a market-price basis in 2025 while VTI returned 17.10% over the same year, illustrating how international allocation can contribute during certain market cycles. Over the latest 10-year window, the relationship has run the other way.