Author Topic: I plan to buy a VTSAX, what happens next?  (Read 2910 times)

fizzgig

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I plan to buy a VTSAX, what happens next?
« on: August 11, 2014, 01:43:39 PM »
I'm just starting to learn about investing after having known absolutely nothing about it. I've seen some convincing cases made for using a VTSAX to build wealth. What I don't understand is, what does one do after that? I don't mean asset allocation in the future. I mean, what happens after that? This would be a long-term plan. Do I just let the money sit there like a savings account? There are fees to pay, also, right? I can add money to the fund, too? I just want to know what to expect, and what I am expected to do after a purchase.

Philociraptor

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Re: I plan to buy a VTSAX, what happens next?
« Reply #1 on: August 11, 2014, 01:51:40 PM »
You sit around and relax. Fees are paid out of what you put in, you don't pay them separately.

How much are you buying?
What type of account are you buying in?

Cwadda

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Re: I plan to buy a VTSAX, what happens next?
« Reply #2 on: August 11, 2014, 01:55:38 PM »
You cancel physical statements and make everything online statements. This gets rid of the $20 annual fee.

Then it just sits there and collects dividends and such. And you feel secure knowing you're paying some of the lowest fees on the market.

gimp

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Re: I plan to buy a VTSAX, what happens next?
« Reply #3 on: August 11, 2014, 02:05:03 PM »
Here's how it works.

You create an account on vanguard. You pick that you want that account to do mutual funds, no brokerage. You choose VTSMX/VTSAX (3k for vtsmx, 10k for vtsax). You supply bank information. Make sure to select e-paper statements to save $20/year. You're done for now.

One or two days later, vanguard makes two very small deposits (10 cents, 20 cents). You go to their website and fill in the details of how much they deposited. This confirms the account is yours and real. They then withdraw those two small deposits within a day, and within a day or two they also withdraw the amount you decided to use for an initial deposit.

You have no fees for having an account as long as you use e-paper statements OR you have over 10k in the account, I believe.

Next, you basically do nothing. The money follows the market decently well.

If you want to deposit more - you just deposit more. The process is simple as long as you're not changing bank details; it just debits $ from your bank account and credits to your fund choice(s).

If you want to withdraw, sure, also easy. If you want to roll dollars from one fund to another, also easy. And so on and so on...

If you want a different type of account (eg, IRA) you just "make a new account" which is a bit confusing, since it links to your main login profile but is indeed a different account. Your web account sees all your holdings / accounts. A tad confusing but that's really the only confusing part.

plank

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Re: I plan to buy a VTSAX, what happens next?
« Reply #4 on: August 11, 2014, 02:06:06 PM »
Are you asking how to start?  Are you in America?  You can either do it through a Roth IRA or just in an investment account.  You would call or go to the website and follow the instructions.  I'm sure people would help you through the process.

Scandium

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Re: I plan to buy a VTSAX, what happens next?
« Reply #5 on: August 11, 2014, 03:39:56 PM »


You have no fees for having an account as long as you use e-paper statements OR you have over 10k in the account, I believe.


Well, there is the ER for the fund, but you never see that or have to do anything. It is taken out automatically. I think that's one of the questions OP had.

Eric

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Re: I plan to buy a VTSAX, what happens next?
« Reply #6 on: August 11, 2014, 03:49:29 PM »


You have no fees for having an account as long as you use e-paper statements OR you have over 10k in the account, I believe.


Well, there is the ER for the fund, but you never see that or have to do anything. It is taken out automatically. I think that's one of the questions OP had.

And in this case, "ER" stands for Expense Ratio, which is a % of your holdings that they charge as a management fee.  With Vanguard, these are generally the lowest in the industry which is why their funds are recommended so highly around here.

Not to be confused with ER meaning Early Retirement, which is where you're headed by dumping your money into VTSAX instead of a new car or luxury items.