Have you ever wondered why a friend who started buying VOO in the same year as you can show a portfolio that makes your heart skip a beat — while your numbers look unmistakably weaker? Same product, same market, same time window — yet the results are worlds apart. What actually happened in between?
The answer is not in the market. It is in the mirror. What you buy has never been the most important variable. How you buy, when you stop, and what you do wrong during a crash — those are what decide whether you retire in 20 years or keep showing up to work.
Today this article will deliver a truth 99% of retail investors refuse to face: with the same product, different behavior builds drastically different destinies. We will run the numbers and convert that gap into New Taiwan Dollars you can feel.
1. Stopping Your Contributions Is Not Protection — It Is Manually Killing Your Returns
The moment the market drops, your phone starts buzzing with alerts, and the instant your account turns red, what is the very first thought in your head? “I’ll pause contributions for now and jump back in when things stabilize.”
That thought sounds rational. It is the most expensive illusion retail investors fall for.
During the 2020 COVID crash, US domestic equity funds saw more than US$326 billion in net outflows in a single month. Retail investors collectively stopped contributing and redeemed. They then watched the market rebound over 70% in the following twelve months. The people who paused contributions at the height of panic did not just miss gains — they personally threw out the single most powerful mechanism behind dollar-cost averaging.
What is dollar-cost averaging at its core? Buying more shares at lower prices. When the market drops 30%, every contribution you make purchases 30% more shares than usual. This is mathematics, not luck. The moment you stop contributing, you break that mechanism — you choose to exit precisely when the market is cheapest.
Let us look at a real scenario. A Taiwanese office worker contributes NT10,000 a month into VOO. When the S&P 500 dropped 34% in March 2020, this investor paused for three months, missing three contribution windows near the historical bottom. Every share purchased in that window gained over 60% within a year. The cost was not NT30,000 — it was more than NT$180,000 in foregone gains.
You might ask: “How am I supposed to know it is the bottom?” Good question — that is exactly why dollar-cost averaging exists. You do not need to know where the bottom is. The system buys in batches for you. The more it falls, the cheaper your purchases. That is the power of the mechanism. The moment you stop, you turn it into “I will re-enter when I feel it has fallen enough.” That is market timing — the easiest way for retail investors to lose money.
2. Selling to Lock In Profits? No — You Are Switching Off the Compounding Engine
When you are up 20%, do you feel like selling? Most people do. When you are up 30%, the itch is irresistible.
This is not your problem. It is human nature — behavioral economists call it the disposition effect: humans are wired to sell winning assets and hold losing ones, because locking in gains delivers instant pleasure while continuing to hold forces you to fight the anxiety of “what if it gives it all back.”
The problem is that this seemingly clever move is mathematically catastrophic. According to JP Morgan Asset Management research, if you had held the S&P 500 for the past 20 years but missed the 10 best trading days, your annualized return would have collapsed from 10% to 5.6% — cutting your terminal wealth in half. Those ten days are scattered across two decades — you cannot predict when they will arrive. And seven of them came right at the start of rebounds, when markets were most fearful and many investors had already sold.
Take Nvidia in 2023 — single-year gain over 230%. But according to Bloomberg data, large numbers of retail investors took profits when the stock had risen only 50% to 80%, watching helplessly as the remaining 150% landed in the pockets of those who held on. You think you are cleverly locking in profit, but in reality you are paying a cognition tax with real money.
There is also a Taiwan-specific cost to selling: overseas income above NT$1 million is subject to a 20% minimum tax liability. Frequent selling only amplifies that tax friction. Long-term holding and fewer transactions are the simplest legal way to lower your tax bill.
3. Think Buying VOO Is Enough? Your Account Is Quietly Bleeding Every Year
Many Taiwanese investors buy VOO through a domestic broker or overseas broker, then leave it alone, convinced they are already “the smart kind of investor.” But there are three costs 99% of people have never seriously calculated.
The first: foreign exchange friction costs. When you convert NT dollars to US dollars, banks and brokers typically embed a bid-ask spread of 0.3% to 0.5%. You convert when you buy, and convert again when you eventually redeem. Round trip, close to 1% of your money simply evaporates.
The second: dividend withholding tax. Dividends paid by VOO’s underlying stocks are withheld at 30% before leaving the United States — because Taiwan and the US have no tax treaty, and IRS rules treat non-US residents at the 30% rate. Every year, the dividends you receive have already been shrunk by 30%.
The third: domestic brokerage commissions. The minimum commission per trade is typically US30. For a small investor putting in around US$300 a month, the minimum fee alone can eat 5% to 10% of a single contribution. This is the slice of your principal that disappears before it even enters the market.
Stack these three leaks together and they can quietly erode 1.5% to 2% of your annual returns every year. You think you are buying a market-cap ETF and passively making money, but in reality your money is leaking out through invisible holes.
4. Two Paths, a NT$2.6 Million Gap — Where Does the Difference Come From?
Let us make this real with hard numbers. Assume an average Taiwanese office worker can invest NT$10,000 a month for 20 years, target VOO, using the S&P 500’s historical annualized return of 10% as the benchmark.
Path One: the behaviorally flawed retail path. Stop contributing during every major crash. Across three large drawdowns in 20 years, this investor paused for 18 months in total, effectively contributing for 222 months with NT3.7 million.
Path Two: the disciplined, system-driven path. Never pause. Lower commissions via an overseas broker. Compress currency friction by converting in batches. Real annualized return: around 9%. Total capital invested over 20 years: NT6.3 million.
**The gap between the two paths is NT2.6 million in Taiwan is enough to retire five to seven years earlier, enough to cover half the down payment on a New Taipei City apartment, enough to finally do the things you have wanted to do for the past 20 years but never had the money for.
Look at the extreme case. In the 2008 financial crisis, the S&P 500 dropped more than 56%, and retail investors stampeded out at the bottom, redeeming more than US$150 billion. But if you had simply held on through March 2009, the market rebounded more than 68% within twelve months. The people who held their nerve through the panic accumulated the most shares at the cheapest prices, pocketing what others lost.
5. Why Has Nobody Told You This Proactively? Because Your Screen-Time Pays Their Bills
Every trade you make generates a commission. Every pause-and-restart cycle generates a fresh subscription fee. Every decision driven by fear or greed adds a number to the platform’s revenue line. A buy-and-hold investor for twenty years is the broker’s least valuable customer — but for you, that is the highest-returning kind of investor you can possibly be.
Financial shows need you to tune in daily, so they give you a different market interpretation every day. Advisory firms need you to rebalance quarterly, so they give you a different allocation recommendation every quarter. This is not a conspiracy theory. It is a business model. Once you understand who is paying for your behavioral costs, you can finally make decisions that actually work in your favor.
6. Four Iron Rules — Read Before You Touch Anything
These four are not suggestions. They are the floor.
Rule 1: Build at least six months of emergency fund before touching VOO. This money lives in a checking account or money-market fund, fully liquid, and it is not your investment portfolio value and not your apartment. Without it, the moment the market drops you will be forced by life pressure to pause contributions — or worse, redeem.
Rule 2: Pay off high-interest consumer debt first. Credit card revolving interest, cash card borrowing above 5% — pay those down before anything else. Your debt rate is higher than your expected investment return. Putting NT$10,000 into the market while letting debt compound at 15% or more is fighting 10% against 15% — negative leverage. You are making yourself poorer.
Rule 3: Calculate expense ratio, FX cost, withholding tax, and commission structure before you enter. You do not need to become an expert. You do need to know what slice of your money disappears every year before it ever hits the market.
Rule 4: Confirm you can stomach a -50% drawdown before deciding your contribution amount. If you cannot keep contributing through a 30%, 40%, or 50% drop, your current contribution size is too high. Cut it down to a number you can keep funding through any scenario. A system you can sustain will always outperform a perfect system you abandon halfway through.
7. A Four-Step Action Plan You Can Finish Today
Step 1: Pull out every VOO trade record you have. Calculate two numbers: your real average cost basis, and the total number of months you have paused contributions across your history. Write it down and pin it in your phone’s notes app. This is not meant to make you sad. It is meant to let reality slap you in the face — only when you see the real numbers will you seriously change.
Step 2: Set up automated contributions. Through your domestic broker’s scheduled-purchase feature or an overseas broker’s automatic investment plan, set a fixed date each month for VOO to be bought automatically. No manual order, no judgment calls. Automation is the only tool that can fight human weakness. Willpower fails. Mechanisms do not.
Step 3: Write down one rule. It should read: “When the S&P 500 falls more than 20% from its high, I will not stop contributing. I will maintain my normal contribution amount. If my life allows it, I will add an extra top-up that month not exceeding 10% of my monthly income.” Screenshot it and save it. When the market crashes, you need to come back and read this sentence — the version of you in that moment needs the rational version of you to make the decision for him.
Step 4: Set a semi-annual investment health-check reminder. Review two numbers: your actual holding return, and whether you paused contributions or redeemed early during the past six months. If you did, ask yourself honestly: was it a real life emergency, or was it emotion? If it was emotion, the thing to adjust is not your investment target — it is your emergency fund.
If you already have a record of pausing contributions, do them in this order: first confirm your emergency fund is intact and your basic life setup is stable; then activate the rule you wrote down and follow it; if you truly must stop investing for now, at the very least do not redeem what you already hold — pausing contributions and exiting the position are two completely different grades of decision; as soon as life stabilizes, restart automatic contributions immediately, even if the amount drops from NT3,000. Restarting is always better than never starting again.
Closing: Buying VOO Is Easy — The Hard Part Is Pressing Contribute During a Crash
Same product, different behavior, drastically different destinies. Buying VOO is not hard. The hard part is whether you can keep contributing when the market is at its most panicked. The hard part is whether you can resist selling when your account is up 30%. The hard part is whether you can execute a single system end-to-end across ten or twenty years.
Behavioral gap is the wealth gap. No need to predict the market. No need to study more. Finish step one today — pull out your trade records and calculate your real average cost basis and the months you paused. Numbers will speak. Numbers will force you to change.
If you found this article useful, drop a comment and share your pause history and your real average buy-in price. And don’t forget to subscribe to the Cash-Powered Lab — every episode we dig out one more financial truth nobody is telling you.
After you finish reading, share this with the friend who “bought the same thing but made more than you” and let them see the real cost of behavioral gaps.
This article contains financial and investment advice. Please evaluate based on your own situation and consult a qualified financial advisor.
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