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I want to start investing

Posted on 9/17/15 at 12:44 pm
Posted by SwampKitty
Brusly, LA
Member since Sep 2015
1143 posts
Posted on 9/17/15 at 12:44 pm
I want to start investing a small amount of money every week.

Someone told me that investment firms etc. only will give you their business if you have x amount of money on account. I am a student and do not make much so I don't have a bunch of money saved. I have more saved than most of the people my age though.

Any advice on what I should do starting out? I would like setup a way to where a set amount is taken out of my checking account every payday, so it builds overtime.
Posted by white perch
the bright, happy side of hell
Member since Apr 2012
7131 posts
Posted on 9/17/15 at 12:54 pm to
vanguard or schwab, commision free ETF's, just set up monthly/biweekly transfers from your bank into the investment account.

also, check out robinhood for commision free trades, but only do that with a minimal amount of money and dont add to it until you are very comfortable with trading. Have you monthly/biweekly contributions go to vanguard/schwab.

and buy good bourbon, you'll need it

Posted by Ace Midnight
Between sanity and madness
Member since Dec 2006
89518 posts
Posted on 9/17/15 at 12:59 pm to
quote:

Any advice on what I should do starting out?


Figure out how much you can consistently put in and stick to it - Vanguard is probably going to be the consensus pick here - start an account with them and send them your monthly buy-ins - eventually, you'll be able to move to their Admiral shares - but stick to the major index funds and you should be fine.

(ETA: The stock market goes up and down. That's completely normal. DO NOT SELL WHEN IT DROPS - that's buying high and selling low - when you think about it that way, it does not make any sense. You want to buy consistently so that you use dollar cost averaging to automatically buy more shares when the market is down and fewer when it is up).
This post was edited on 9/17/15 at 1:01 pm
Posted by SwampKitty
Brusly, LA
Member since Sep 2015
1143 posts
Posted on 9/17/15 at 12:59 pm to
should I go with vanguard or schwab? Also what kind of investment account do I choose? I don't really know much about investing.
Posted by Ace Midnight
Between sanity and madness
Member since Dec 2006
89518 posts
Posted on 9/17/15 at 1:03 pm to
quote:

Also what kind of investment account do I choose?


Depends on your tax profile - I would default to a Roth IRA unless you are already in a very high tax bracket now. If you're eligible for that, go with that.

And, I highly recommend sticking to major indices for the long-haul. Anything else requires too much work for minimal (or even dubious) benefit.
Posted by white perch
the bright, happy side of hell
Member since Apr 2012
7131 posts
Posted on 9/17/15 at 1:07 pm to
I use both, buy commision free ETF's. I through schwab i have SCHG, SCHM, SCHA, SCHD, RYE, RPG.

through vanguard, I have Mutual funds, this is my SEP IRA for retirement. I dont know the tickers off hand, but its large cap growth index, mid cap growth index, small cap growth index, total stock market index, and international growth.
Posted by JamalSanders
On a boat
Member since Jul 2015
12135 posts
Posted on 9/17/15 at 1:20 pm to
I just stared with Robinhood. I like it so far. The free trades are nice.
Posted by bayoubengals88
LA
Member since Sep 2007
18916 posts
Posted on 9/17/15 at 7:44 pm to
I like Betterment for your situation.
Posted by white perch
the bright, happy side of hell
Member since Apr 2012
7131 posts
Posted on 9/17/15 at 8:18 pm to
quote:

I just stared with Robinhood. I like it so far. The free trades are nice.


to be completely truthful, they aren't free, there is a 2 cent tax on each trade. Robinhood doesnt charge anything, but the tax cannot be avoided and that goes with any platform.
Posted by player711
Member since Jun 2006
285 posts
Posted on 9/17/15 at 8:45 pm to
You can do wealth front or betterment with less money and go with a cheap index fund,
Posted by foshizzle
Washington DC metro
Member since Mar 2008
40599 posts
Posted on 9/17/15 at 10:10 pm to
quote:

Any advice on what I should do starting out? I would like setup a way to where a set amount is taken out of my checking account every payday, so it builds overtime.


That is an excellent way to start. I would work hard on increasing your income so you can save more, but regardless of anything else if you don't put your savings on automatic then it won't happen.

Personally I have no experience with Vanguard directly, they may be outstanding but I have been a very satisfied Schwab customer for about 15 years now.
Posted by Jag_Warrior
Virginia
Member since May 2015
4089 posts
Posted on 9/18/15 at 12:58 am to
quote:

should I go with vanguard or schwab? Also what kind of investment account do I choose? I don't really know much about investing.


I would suggest reading about investing and setting financial goals before you open any sort of investment account. No different than knowing how to drive BEFORE you buy a car. There's no harm in dropping some spare cash into an index fund or something like that. But without knowing why you're doing what you're doing, you run the risk of just being along for the ride.

Just my 2 cents. Good luck.
Posted by Oenophile Brah
The Edge of Sanity
Member since Jan 2013
7540 posts
Posted on 9/18/15 at 8:06 am to
Not sure how much money you have available at the moment. If under $2k, I might consider opening an online savings account like Ally. You're not going to get much of a return (1.0% or so) but you can get used to making the regular deposits and build up to $1-2k which will make opening a Vanguard fund available.
Posted by Hog on the Hill
AR
Member since Jun 2009
13389 posts
Posted on 9/18/15 at 9:36 am to
First question: do you have any savings for emergencies? If your car broke down, could you fix it? If you had a trip to the ER, could you pay for it? If something happened to your income (student loans or job, not sure what your situation is), could you afford rent for the next six months? What if you found yourself in need of a lawyer?

If you don't have enough saved to handle these kinds of unexpected events, just stick your money in a savings account for now. You should only invest after you have a comfortable amount of emergency savings.

Trust me, shite happens. I had $15,000 in cash savings for emergencies and never thought I'd use it. I just burned through it in a few months, all for unavoidable expenses that were no fault of my own. If I had invested most of that $15,000, I probably would have had to withdraw from my Roth IRA and taken the tax penalty.
This post was edited on 9/18/15 at 9:44 am
Posted by thatguy777
br
Member since Feb 2007
2384 posts
Posted on 9/18/15 at 9:47 am to
There's no tax penalty on contributions to a Roth. Only on gains.
Posted by JamalSanders
On a boat
Member since Jul 2015
12135 posts
Posted on 9/21/15 at 11:28 am to
quote:

to be completely truthful, they aren't free, there is a 2 cent tax on each trade. Robinhood doesnt charge anything, but the tax cannot be avoided and that goes with any platform.


Near free trades. I max out my company IRA and that only leaves me about $150/ month to either piss away or do something with. I like Robinhood because there is no minimum for an account and I am not eating up large percentages of money when I buy 2 shares of a $5 stock.
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