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Message
re: Help a young buck become a savvy investor
Posted on 10/30/14 at 12:10 pm to Tigerfan56
Posted on 10/30/14 at 12:10 pm to Tigerfan56
@OP - save as much as you can and then try to save more than that. Put it into an index fund and then forget about it.
But at this stage of life the more important thing is to boost your income as much as possible.
But at this stage of life the more important thing is to boost your income as much as possible.
Posted on 10/30/14 at 12:12 pm to TigerTatorTots
if Vanguard is your choice, call them, NOT your adviser to find out what to do. The adviser is going to tell you why it's such a bad idea.
Before you do anything, research this a little. You don't know me or other posters from Adam and we could be completely nuts
how to move IRA to Vanguard
(personally, I would move it someone like Fidelity instead of Vanguard directly. They have far more tools, research, info and you can buy a very similar ETF (ITOT) for no commissions. If you are sold on a Vanguard ETF thopugh, you'd have to pay $8/trade, which is a lot on $100 buys.)
Before you do anything, research this a little. You don't know me or other posters from Adam and we could be completely nuts
how to move IRA to Vanguard
(personally, I would move it someone like Fidelity instead of Vanguard directly. They have far more tools, research, info and you can buy a very similar ETF (ITOT) for no commissions. If you are sold on a Vanguard ETF thopugh, you'd have to pay $8/trade, which is a lot on $100 buys.)
This post was edited on 10/30/14 at 12:17 pm
Posted on 10/30/14 at 1:03 pm to Ole War Skule
quote:
personally, I would move it someone like Fidelity instead of Vanguard directly. They have far more tools, research, info and you can buy a very similar ETF (ITOT) for no commissions
I have a Schwab account because they seem to have the most commision free trades. Is there a fund or ETF similar to VTSMX through Schwab?
Posted on 10/30/14 at 2:23 pm to white perch
I chose trade because I like having the ability to buy stocks in the same account. There are some downsides though.
Posted on 10/30/14 at 2:31 pm to Creamer
You might want to go with a traditional IRA instead of a Roth. You are going to be making more money eventually I would hope.
This post was edited on 10/30/14 at 2:33 pm
Posted on 10/30/14 at 2:57 pm to TigerTatorTots
quote:
How hard is it to withdraw funds from my current ROTH and roll it into a Vanguard? I assume I'll have to pay a visit to my dad's financial adviser who started it for me.
You should be able to have Vanguard, Fidelity, etc, or just one of the online brokerages like Scott Trade or Etrade transfer your IRA funds by giving them information that should be available on your current account statements. I did this after getting soaked with fees by an advisor for several years, they were pretty pissed when they saw I pulled the funds without consulting them.
This post was edited on 10/30/14 at 2:59 pm
Posted on 10/30/14 at 3:55 pm to white perch
"Schwab U.S. Broad Market ETF SCHB is a suitable core holding and offers one of the lowest-cost ways to obtain diversified exposure to the U.S. stock market. This fund attempts to track the Dow Jones U.S. Broad Stock Market Index, a market-cap-weighted composite of the largest 2,500 U.S. stocks. This broad coverage excludes only illiquid and volatile micro-caps. This omission may slightly reduce the fund's diversification benefits and return potential. However, these stocks don't have much influence on even the broadest funds because of their small representation in the total market."
No comm. .04% exp broad market ETF
"Pros
• The low expense ratio makes this the cheapest broad U.S. equity exposure available to individual investors.
• Substantial stakes in mid- and small-cap stocks help provide diversification.
• Giant-cap multinational companies such as Apple and Exxon Mobil help anchor the portfolio, preventing undue risk from smaller-cap names.
Cons
• For investors who are putting large amounts of money to work or who are not Schwab customers, the more liquid Vanguard Total Stock Market ETF may be cheaper after trading costs.
• This fund could lag its large-blend category peers when small-cap stocks fall out of favor.
• The fund uses a representative sampling methodology, which means that it does not actually own every security in the index. While that lowers trading costs, it may result in greater tracking error."
ETA: I should have quoted the pros and cons as they are from Morningstar, not me
No comm. .04% exp broad market ETF
"Pros
• The low expense ratio makes this the cheapest broad U.S. equity exposure available to individual investors.
• Substantial stakes in mid- and small-cap stocks help provide diversification.
• Giant-cap multinational companies such as Apple and Exxon Mobil help anchor the portfolio, preventing undue risk from smaller-cap names.
Cons
• For investors who are putting large amounts of money to work or who are not Schwab customers, the more liquid Vanguard Total Stock Market ETF may be cheaper after trading costs.
• This fund could lag its large-blend category peers when small-cap stocks fall out of favor.
• The fund uses a representative sampling methodology, which means that it does not actually own every security in the index. While that lowers trading costs, it may result in greater tracking error."
ETA: I should have quoted the pros and cons as they are from Morningstar, not me
This post was edited on 10/30/14 at 4:02 pm
Posted on 10/30/14 at 3:59 pm to Ole War Skule
quote:
Ole War Skule
I own SCHG now, I'll prolly get some SCHB now too.
Posted on 10/30/14 at 5:02 pm to Tigerfan56
At OP - I was where you are about 4 years ago and wondering the same thing. Should I pick my own stocks, experiment, start small? I had lots of questions on what to do and honestly made it more difficult than it needs to be. Just keep it simple. Open a Roth IRA with Vanguard, Fidelity, or some other low cost broker, buy a target fund or total market fund and feed it every month until you max out for the year. I use Vanguard and their minimum is $1000 for one of the target funds. Join your company's 401k as soon as your able and put in at least enough to get the company match (more if you can).
Stock picking sounds cool but in reality it's extremely difficult to beat the market and you're better off buying an index fund.
Stock picking sounds cool but in reality it's extremely difficult to beat the market and you're better off buying an index fund.
Posted on 10/30/14 at 5:31 pm to dlmast87
Your contributions should look like this (when you are able to contribute to 401K)
1. Invest in your 401K up to the contribution limit
2. Max out IRA
3. Max out 401K
From there you are looking at taxable accounts (except for munis and variable annuities, neither of which you should be concerned with at your age).
For now you can get in something like https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/productoverview?fundId=0932.
You can create the account online.
The rule of thumb is 100 - age for the ratio of equities you want to be in, but it might as well be 95% for most people under 30.
Remember the average return for an individual investor picking his own stocks usually hovers around 5%. Wait until you have play money available to start play money accounts.
***Before investing I would save up for a downpayment on a house.
1. Invest in your 401K up to the contribution limit
2. Max out IRA
3. Max out 401K
From there you are looking at taxable accounts (except for munis and variable annuities, neither of which you should be concerned with at your age).
For now you can get in something like https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/productoverview?fundId=0932.
You can create the account online.
The rule of thumb is 100 - age for the ratio of equities you want to be in, but it might as well be 95% for most people under 30.
Remember the average return for an individual investor picking his own stocks usually hovers around 5%. Wait until you have play money available to start play money accounts.
***Before investing I would save up for a downpayment on a house.
This post was edited on 10/30/14 at 5:32 pm
Posted on 10/30/14 at 5:37 pm to Retrograde
A lot of people are doing 110-age nowadays but everything you said is good advice to follow
Posted on 10/31/14 at 9:05 am to Retrograde
I love my 401k so much. I contribute a mandatory 9% every month and they contribute 15% every month. It's beautiful.
Unfortunately my job sucks and I won't be able to afford to stay here for that long and I'll lose everything they have contributed if I don't stay at least 8 years
Unfortunately my job sucks and I won't be able to afford to stay here for that long and I'll lose everything they have contributed if I don't stay at least 8 years
Posted on 10/31/14 at 10:17 am to The Tax Collector
I had a feeling that sounded to good to be true. My company matches at 4.5%, but I can take all of that with me tomorrow if I wanted to.
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