Please Help with Roth Question

Most funds have a min then a min for ira's. But yes you have to reach the min

Trowe waves minimum if you do automatic monthly withdrawals from bank account to fund. I think it requires 50 bucks a month to start. It has been a while since I started mine though

You can buy just like you would in a regular brokerage account. You can even day trade options in a Roth if you have the options agreement paperwork done.

If you're invested in a fund you'll have to meet the fund minimum, but that would be true whether it's in a Roth or not.

I don't know your specific fund choices but I have been a Schwab customer for over ten years and have no plans to change that. The customer service is very solid.

Regarding initial investment size, I hate to break it to you but if you can't throw several thousand into a fund then it probably doesn't matter much what you do. The best fund out there in a given year might get you 30%, but if you only have $500 invested that amounts to $150 for the entire year. Just focus on contributing as much as possible to the Roth, returns don't matter quite so much until you have more cash.

Save up till you get the 1000 for Vanguard's STAR fund.


Then go for there.



You aren't losing much with the amount of money you are talking about.

Might even be gaining if the market corrects.

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Might even be gaining if the market corrects.

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Yep. The best thing that could happen is if the market drops and stays there for 30 years while you pour money into it out of frustration. And then everything comes roaring back.

STAR has a lower minimum but if you want an actively managed Vanguard fund with a 60/40 stock/bond split, Wellington is a better option. If you want the index equivalent, check out Lifestrategy Moderate Growth.

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Higher bond ratio

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True but STAR also holds 12% in cash equivalents. Total stock holdings are higher in Wellington.

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far less diversification

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True, but Wellington holds about 100 stocks and 500 bonds across all sectors. That's plenty of diversification, in fact, Wellington also has a lower beta.

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and as a consequence lower historical returns

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This is incorrect. Wellington has outperformed STAR in all time periods. It's pretty close though.

Wellington also has a lower expense ratio. Plus, you also have access to Admiral shares in Wellington which further lowers the ER. STAR has no Admiral shares.

Wellington has also made 8% since 1929. It's seen everything.

And if you care about this kind of thing, Wellington is a 5 star Morningstar fund, vs. 4 for STAR.

Both are good funds, I just think Wellington is better for a retirement account. In a taxable account, the LifeStrategy equivalent is better.

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How should i approach diversity.

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I see others have weighed in here already so I'll restrict myself to defining what "diversity" really means. It is not randomly investing in a bunch of different stuff. It is investing in different things that tend to react differently to the same events.

For example, if you have an international stock fund and decide to buy stock in Halliburton, you are not gaining much diversification b/c Halliburton is a big multinational company and is exposed to many of the same risks as an international stock fund. OTOH if you were to instead buy an international bond fund, then you gain diversification with respect to interest rate changes in those countries.

This doesn't protect you against losses, it gives you a better risk/reward ratio. On the topic of risk, if you have multiple accounts it's better to have your riskier assets in a Roth and the less risky ones in something else (like a 401) because your gains are not taxed in a Roth.