To add to this, I'm a big fan of starting with a three-fund "lazy portfolio" if you're just starting out but want a little more control than a target-date fund.
Originally Posted by Demonpenz:
I am looking to park cash. I already have money in vanguard from a previous employer. Do I need to move it around? Do I need to sign up again once for employee retirement one for parking?
Dakcman is right. Don't park it in a retirement account. You'll get destroyed when you take it out. Mason jar would be better than a retirement account if you plan to get it out.
Keep some cash in the bank though for incaseshit money. While investment accounts are pretty liquid it does take a little time. Plus if you pull some out a couple times a year because your refrigerator died or you need tires or whatever you'll have to pay tax on the gain and do all the bullshit on the tax return for short and long term gain splits and all that bullshit for a grand or whateever may take some shine off your gains. Especially if you are doing your own taxes now and have to hire a professional for a few bucks of cap gain.
Bottom line: keep some cash in the bank.
What a lot of people did before the interest rate went to LOL is have 12 12 month CDs that mature each month. That way you've always got a little money available each month and if shit gets hairy the bank will loan you money against the CDs. Probably not a good idea until interest rates come off the ground some. [Reply]
It said I needed 3000 to buy a mutual fund is that right? Maybe in a year. Also so I just pick likeIntermediate-Term Bond Index Admiral Shares and start buying that? [Reply]
Originally Posted by Demonpenz:
It said I needed 3000 to buy a mutual fund is that right? Maybe in a year. Also so I just pick likeIntermediate-Term Bond Index Admiral Shares and start buying that?
Individual is correct. Most (all?) mutual funds, including index funds, require minimum investment amounts usually starting around $2500.
If you can't do that and just want to park money elsewhere than a brick and mortar bank paying 0.05% interest look into an online savings account. Ally bank currently pays 1.15%, Synchrony pays 1.20%, some others are up to 1.30%. [Reply]
Originally Posted by DaKCMan AP:
Individual is correct. Most (all?) mutual funds, including index funds, require minimum investment amounts usually starting around $2500.
If you can't do that and just want to park money elsewhere than a brick and mortar bank paying 0.05% interest look into an online savings account. Ally bank currently pays 1.15%, Synchrony pays 1.20%, some others are up to 1.30%.
Synchrony's call center is in KC tht is cool. 2500 is what I need to shoot for a guess. I was looking for a Cutless so me and TheVirus could go look for some big titties and fat asses but that will have to wait. [Reply]
Originally Posted by Demonpenz:
It said I needed 3000 to buy a mutual fund is that right? Maybe in a year. Also so I just pick likeIntermediate-Term Bond Index Admiral Shares and start buying that?
That link is vbiix. Underneath the fund name, Vanguard Intermediate.., you'll see hyperlinks to the admiral share class and the ETF. The Admiral shares have lower expense ratios but cost even more to get into (10k in this case). The ETF is a stock version. They typically have the same ER as the Admiral shares and the minimum is whatever 1 share costs to buy. In this case 80 something bucks.
Both the ETF and the mutual fund hold the same underlying assets. You can start with the ETFs and shift into mutual funds once you have the minimums. Once your comfortable buying ETF as stock there aren't many reasons to purchase mutual funds though. They're pretty inferior unless you want automated investing on deposits every two weeks [Reply]
That link is vbiix. Underneath the fund name, Vanguard Intermediate.., you'll see hyperlinks to the admiral share class and the ETF. The Admiral shares have lower expense ratios but cost even more to get into (10k in this case). The ETF is a stock version. They typically have the same ER as the Admiral shares and the minimum is whatever 1 share costs to buy. In this case 80 something bucks.
Both the ETF and the mutual fund hold the same underlying assets. You can start with the ETFs and shift into mutual funds once you have the minimums. Once your comfortable buying ETF as stock there aren't many reasons to purchase mutual funds though. They're pretty inferior unless you want automated investing on deposits every two weeks
This is a great post Demonpenz.
This is a great post and I totally agree. No reason you can't just have that individual brokerage account and do ETFs, which are in a simple sense, mutual funds that can be traded like stocks.
I only purchase mutual funds in my retirement accounts as they usually have higher fees. In my individual brokerage account I'll purchase the ETF equivalent or index as it's more liquid. With Vanguard, TD Ameritrade and most other online brokerage accounts, they offer a list of Free trades with certain ETFs. With my TD Ameritrade account I have access to 101 ETFs that I can trade commission free. Meaning if I only want to invest a few hundred dollars in some ETF, I can and not get eaten up in fees for such a low initial investment. I can trade this months later and again, it's free. I think this is your best option. Watch the fees on other ETFs though. If you only plan on buying a few hundred dollars of shares at a time, the fees can eat you up pretty quick.
Pretty sure Vanguard ETFs are free with a brokerage account there though.
If you wanna make sure the ETF is free trades before buying, you can always call them. Their customer services is very good. Here's a list as well. 55 different choices on the free list from what I can tell.
