Author Topic: How often to fund your index fund?  (Read 2249 times)

jollari

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How often to fund your index fund?
« on: May 05, 2013, 11:27:47 AM »
Okay, so I realize that this is a pretty "day-one" type of question, but I'm curious as to what is recommended for putting money into your index fund. Assuming you've put the initial Vanguard deposit into your account and bought VFINX - going forward, is this something you should be putting a percentage of your paycheck to each week - how much? and at what frequency?

GreenGuava

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Re: How often to fund your index fund?
« Reply #1 on: May 05, 2013, 12:45:48 PM »
"Day one" type questions are always welcome.

You missed step one, actually:  make a written investment plan, including deciding on an asset allocation.  You also need to decide what you're saving for, and if all of your retirement accounts are going to be treated as one (as opposed to treating taxable and tax-advantaged separately).

Among other things, you need to have decided if VFINX is the right index fund for you.  It isn't a bad fund, but many of us prefer the total stock market index (greater diversity, same expense ratio, among other reasons) for our domestic (U.S.) allocation.   You also may want to be diversified internationally - check out Vanguard's total international stock market index (this has the added bonus that you'll get some credits for foreign tax paid on this one).

As for the frequency, it doesn't really matter.  I keep my emergency fund in my bank (my 'stash isn't large enough to warrant going without -- yet) and, after I've paid each month's bills, I use what's leftover (budgeted for, so I generally know how much it will be, although it's sometimes more than anticipated if I've spent less than planned) to put into my asset allocation.  Others do this quarterly.  Some have a designated amount they put in each month and leave the rest to spend.

Mazzinator

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Re: How often to fund your index fund?
« Reply #2 on: May 06, 2013, 07:43:14 AM »
Greenguava.. I agree..

For the frequency..i guess you could look at it as the sooner it's in the fund, the sooner it's gaining, and the less tempting it is to spend it..although worrying about spending is more of a nonmustashian issue..but it helps some newbies...

If you send the money to savings/debt first, then you are forced to stay on your budget..

Just trying to help...

twinge

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Re: How often to fund your index fund?
« Reply #3 on: May 06, 2013, 08:26:13 AM »
I would say whenever you have money. 
You know yourself more, but if you're an "optimizer" like many on this site, planning percentages and timetables can hold you back.  We tend to find ways to squeeze even more out of expenses and into investments.  BUT if you're not at that stage yet or of that temperament naturally, you might want to set a goal that's out of your current reach, meet it and then raise the bar.