Travel nurses have high incomes, high mobility, and limited time. Index funds solve for all three.
Why Index Funds for Travel Nurses
Low maintenance. On a 13-week assignment, you don’t have time to research stocks or monitor a complex portfolio. Index funds buy the whole market — you don’t make decisions, you just hold.
Low cost. The average index fund charges 0.03–0.20% in annual fees. Active funds often charge 1%+. On a $200,000 portfolio over 20 years, that 0.8% difference compounds to roughly $40,000 in lost returns.
Consistent performance. Over long periods, the overwhelming majority of actively managed funds underperform their benchmark index. The research on this is extensive and largely settled. Not picking individual stocks or managers isn’t giving up — it’s the statistically optimal approach.
Tax efficiency. Index funds have low turnover, which means lower capital gains distributions. For money in a taxable brokerage account, this matters significantly.
The Three-Fund Portfolio
The simplest evidence-backed approach for most investors:
- Total US Stock Market Index (e.g., VTI or VTSAX) — US stocks across all company sizes and sectors
- Total International Stock Market Index (e.g., VXUS or VTIAX) — international developed and emerging markets
- Total Bond Market Index (e.g., BND or VBTLX) — investment-grade US bonds for stability
A reasonable allocation for a nurse in their 30s: 70% US stocks, 20% international, 10% bonds. More aggressive (more stocks) when young, gradually shifting to more bonds as retirement approaches.
You don’t need all three. Total US Stock Market alone, held consistently for decades, has historically produced excellent returns. Adding international and bonds improves diversification but complicates the setup.
Where to Buy Index Funds
Fidelity: No minimums, excellent index funds (FZROX, FZILX are literally zero expense ratio), great interface. Recommended for most nurses.
Vanguard: The pioneer of index investing. Slightly dated interface but solid funds and investor-owned structure (costs stay low). Good for long-term holders who don’t need an active app.
Schwab: No minimums, competitive funds, excellent customer service.
M1 Finance: Mobile-first, automatic portfolio rebalancing, no trading fees. Good for nurses who want to set allocations and have investing run automatically.
Tax Location Strategy
Put your most tax-efficient investments in your taxable brokerage (if you have one) and your least efficient in your Roth IRA:
In Roth IRA: Growth-focused investments — total US stock market, international. You want the highest-returning assets growing tax-free.
In taxable brokerage: Tax-efficient funds like total market index funds. Avoid actively traded funds or high-dividend funds here.
In traditional IRA (if applicable): Can hold anything — the tax deferral is the same for all returns.
How Much to Invest
For Roth IRA: max it if possible — $7,000 in 2024. This is the most powerful step you can take.
For taxable brokerage: invest after maxing your IRA. Any amount works; automate it if possible (even $200/month adds up dramatically over a career).
Don’t wait until you have a “real” amount. $1,000 invested at 25 is worth more than $10,000 invested at 40, compounding at 7% annually.
The Setup Process
- Open an account (Fidelity or Schwab takes 10 minutes)
- Fund the account via bank transfer
- Buy your chosen index fund(s) — a total market fund alone is completely fine
- Set up automatic contributions if possible
- Ignore it
The “ignore it” step is genuinely the strategy. Successful index fund investors don’t react to market drops, don’t try to time buys, and don’t switch funds based on recent performance. They invest consistently and hold for decades.
Open your brokerage account on your next day off. It takes 10 minutes. The limiting factor for most travel nurses isn’t knowledge — it’s inertia. Remove the friction by doing it now.
The Travel Nurse Tax Checklist
13 deductions most travel nurses miss + a state-by-state filing reference guide.
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