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Message
VTSAX question
Posted on 4/21/22 at 9:26 pm
Posted on 4/21/22 at 9:26 pm
I opened a Roth IRA recently and was researching mutual funds to invest in. I realized that the minimum to invest is $3k with a .15% expense ratio and $10k with a .04% expense ratio. I am new to this and didn’t consider a minimum investment amount.
At the moment I can’t put $10k into this right now but I can contribute the $6k per year towards the IRA. My question for the board is could I just contribute towards IRA until I have the $10k and then invest that into VTSAX mutual fund? Or is there a better way of going about that.
I use Fidelity and currently have a 401k with them from old employer but my new employer does not use Fidelity for their 401k plan. I’ve been wanting to open a Roth IRA for a while and figured this would be good as time as any to start.
EDIT: I believe I found a thread from this board that may answer my question
LINK
If you have anything to add please do. I have asked advice from this board before and you guys helped me out a lot.
At the moment I can’t put $10k into this right now but I can contribute the $6k per year towards the IRA. My question for the board is could I just contribute towards IRA until I have the $10k and then invest that into VTSAX mutual fund? Or is there a better way of going about that.
I use Fidelity and currently have a 401k with them from old employer but my new employer does not use Fidelity for their 401k plan. I’ve been wanting to open a Roth IRA for a while and figured this would be good as time as any to start.
EDIT: I believe I found a thread from this board that may answer my question
LINK
If you have anything to add please do. I have asked advice from this board before and you guys helped me out a lot.
This post was edited on 4/21/22 at 9:35 pm
3
Posted on 4/21/22 at 9:50 pm to Bronson2017
yeah dont over think it ... you can invest in the "smaller initial" fund with a slightly higher expense ratio ... then once you hit the number for the admiral fund you can simply upgrade to that one
happy investing
happy investing
Posted on 4/21/22 at 9:52 pm to Shankopotomus
Thank you sir. I was going to ask about that in my post and forgot!
Posted on 4/21/22 at 10:17 pm to Shankopotomus
I’m with Vanguard and they automatically upgraded me to the admiral shares version of the funds I’m in as I met the thresholds. Just keep contributing and Fidelity should do the same as you meet the threshold.
This post was edited on 4/21/22 at 10:18 pm
Posted on 4/21/22 at 10:23 pm to TDsngumbo
Also, how old are you? If you’re looking for an index fund and you’re young, I’d go with an S&P 500 index fund or one that follows the NASDAQ. The NASDAQ is on sale big time right now so it would be great to load up now then watch it grow later when that rebounds. Lots of tech sector stuff there and that’s never going to not grow over time. Many will say to go with individual stocks but I like to keep it simple.
This post was edited on 4/21/22 at 10:25 pm
Posted on 4/21/22 at 10:44 pm to Bronson2017
Just invest in VTI instead of VTSAX. It's the same thing and you don't have minimums and all that stuff.
Posted on 4/22/22 at 12:10 am to FnTigers
VTI is the answer. It's just the ETF equivalent.
Posted on 4/22/22 at 7:33 am to Bronson2017
If you want a total stock market index fund, there is also a Fidelity version of VTSAX. The Fidelity version is FSKAX. I think there is a lower expense ratio and no minimum (at least showing in my Roth with Fidelity). It isn't as popular as VTSAX and the Vanguard funds but will perform the same. It is just another option to consider.
Posted on 4/22/22 at 8:07 am to FnTigers
quote:
Just invest in VTI instead of VTSAX. It's the same thing and you don't have minimums and all that stuff.
Or do like i did and invest in VDIGX.. it’s practically the same as VTI and VTSAX but it pays dividends, which is why i selected it .. im also in VGSLX which is their real estate Admiral fund , also dividend paying .
Posted on 4/22/22 at 8:59 am to BK Lounge
Just to add a little on my rationale for dividend stocks- i love waking up once a quarter or once a month and having extra money in my checking acct from investments i made months or years ago.. it suits me, since my goal is to have a purely passive income in a few years.. for some of you guys with advanced economics degrees, it may not matter or there might be more efficient ways of doing it.. but for me, someone who is relatively new to investing over the last few years, just psychologically speaking- seeing the money flow in like that establishes that ‘it’s possible, it’s happening’- now it’s just a matter of scaling up to get to where i want to be, even if it takes 10 or 15 yrs .
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This post was edited on 4/22/22 at 9:11 am
Posted on 4/22/22 at 9:09 am to TDsngumbo
quote:
I’m with Vanguard and they automatically upgraded me to the admiral shares version of the funds I’m in as I met the thresholds.
Would this be the case if I get invested in VTI like a couple posters above mentioned?
EDIT: I see you meant your brokerage is Vanguard and that’s why. My bad
This post was edited on 4/22/22 at 9:10 am
Posted on 4/22/22 at 9:14 am to TDsngumbo
quote:
Also, how old are you?
I am 28.
Posted on 4/22/22 at 9:15 am to BK Lounge
Just for the record VDIGX is not close to VTI/VTSAX. I am not saying it is a bad investment but saying it is practically the same as VTI/VTSAX is not accurate at all. In my opinion you are losing upside for a slightly bigger yield while losing diversification with a higher expense ratio.
You are going from 4,000 stocks to 40
You are going from 0.04% to 0.26% expense ratio
You are going from ~1.2% yield to ~1.4%
The returns from the last 5, 10, 20 years all go in favor of VTI/VTSAX by a good bit. These will likely be somewhat cyclical and I am sure there are periods where the dividend fund outperformed.
I could understand wanting the dividend to provide cash flow but to me it would take more than 0.2% gain in yield for what you are giving up. The issue is saying it is practically the same as VTI/VTSAX is disingenuous.
You are going from 4,000 stocks to 40
You are going from 0.04% to 0.26% expense ratio
You are going from ~1.2% yield to ~1.4%
The returns from the last 5, 10, 20 years all go in favor of VTI/VTSAX by a good bit. These will likely be somewhat cyclical and I am sure there are periods where the dividend fund outperformed.
I could understand wanting the dividend to provide cash flow but to me it would take more than 0.2% gain in yield for what you are giving up. The issue is saying it is practically the same as VTI/VTSAX is disingenuous.
Posted on 4/22/22 at 9:18 am to bod312
Gotcha, i stand corrected.
Like i said, i definitely dont have an economics degree lol.. but yeah, the dividend thing is important to me, so it works in my case but YMMV of course .
Like i said, i definitely dont have an economics degree lol.. but yeah, the dividend thing is important to me, so it works in my case but YMMV of course .
Posted on 4/22/22 at 9:19 am to bod312
Since you seem knowledgeable , are there any specific dividend stocks you do recommend, Vanguard or otherwise ?
Posted on 4/22/22 at 9:56 am to BK Lounge
You're in the age old dividend vs total return debate. Raging for eons.
Posted on 4/22/22 at 10:04 am to BK Lounge
For starters I definitely am not saying you should not invest in VDIGX just that it is not the same as VTSAX.
I really don't have any recommendation for a dividend stock or fund. I would just put more emphasis on total returns versus dividend yield. You will still come out ahead by selling shares if the total returns are higher for non-dividend funds versus a dividend fund.
I really don't have any recommendation for a dividend stock or fund. I would just put more emphasis on total returns versus dividend yield. You will still come out ahead by selling shares if the total returns are higher for non-dividend funds versus a dividend fund.
Posted on 4/22/22 at 11:31 am to BK Lounge
You weren't asking me but agricultural REITs have paid off for me in terms of dividends lately, especially since late Feb.
LAND and FPI are what I'm in but there are others.
LAND and FPI are what I'm in but there are others.
Posted on 4/22/22 at 12:12 pm to Teddy Ruxpin
quote:
You're in the age old dividend vs total return debate. Raging for eons.
Yeah and i think the answer is different for different people.. for someone who’s simple minded like myself :-) , if you connect your Vanguard account to your checking account, as ive done- there’s something satisfying about seeing those dividends and capital gains hitting your bank account, and then watching the amount grow over the years.. i do the same thing with Fundrise, which is a crowdfunding, real estate syndication entity (sort of similar to Blackrock) that’s done extremely well for me as the housing market has exploded.. . my investments with them have grown and i also see dividends from them.. eventually i plan to invest in LTC, STAG and others, with an eye towards that passive income nut I mentioned.. but obviously others may have different goals, which is understandable .
Posted on 4/22/22 at 6:54 pm to TDsngumbo
quote:
The NASDAQ is on sale big time right now so it would be great to load up now then watch it grow later when that rebounds. Lots of tech sector stuff there and that’s never going to not grow over time.
I've thrown a lot into CIBR the last 6 months after going and working at a startup cyber security firm. The amount of Enterprise companies completely unprepared or underprepared for a cyber attack and the risk of being attacked are astronomical. There will be a lot of money spent in the IT/Cyber Security Infrastructure space in the next decade.
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