Author Topic: No minimum Index Fund  (Read 2239 times)

MrWindUpBird

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No minimum Index Fund
« on: June 29, 2014, 09:11:32 PM »
Hello everyone,

I'm new to the site and am looking for investing advice. I am a recent graduate with very little funds working an unpaid internship (hooray). I still want to start investing my savings from the little money I'm living on now, but there is no way I'll be able to meet Vanguard's minimum investment of $3000 for its TSMX fund.

I'm wondering if anyone knows a good total market index fund I can invest in for now that has a lower minimum, even of say $2000. I don't want my money to go to waste just sitting in my account but I also don't want to make a crappy investment. So help is appreciated!




rmendpara

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Re: No minimum Index Fund
« Reply #1 on: June 29, 2014, 09:27:49 PM »
A broadly diversified fund will be best, and Vanguard/Fidelity are considered tops in low-fee funds. Look through the list of funds, I believe there are some with lower minimums than $3k.

Over the long-term, assuming you don't greatly increase your income, your overall success will depend much more on how frugal you are and how consistently you save & invest rather than making crazy gains in the market.

Given your low investable assets, I would just save up in a savings account until you can hit the $3k minimum. A few months here or there isn't going to make a huge difference on such a small balance.

I'm not sure what your budget is, and how much you project to be able to save each month, but I might even skip investing for the time being until I had some solid backup savings put away and a steadier job situation.

slugline

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Re: No minimum Index Fund
« Reply #2 on: June 29, 2014, 09:31:56 PM »
Looked into exchange-traded funds (ETFs) yet? I think you can buy into those with much lower minimums.

Also, are you pretty certain that this is money you won't be touching for a while? It's important to understand time-horizons and risk. For example, if this is buy-a-car-in-six-months money, I would not expose it to the volatility of the stock market.

johnintaiwan

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Re: No minimum Index Fund
« Reply #3 on: June 30, 2014, 07:18:41 AM »
Looked into exchange-traded funds (ETFs) yet? I think you can buy into those with much lower minimums.

Also, are you pretty certain that this is money you won't be touching for a while? It's important to understand time-horizons and risk. For example, if this is buy-a-car-in-six-months money, I would not expose it to the volatility of the stock market.

second this, just buy the etf

AH013

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Re: No minimum Index Fund
« Reply #4 on: June 30, 2014, 08:29:46 AM »
+1 to ETFs.  I think you can open an account with Vanguard for as little as $1,000, and ETFs generally cost under $100.  Minimum purchase would be 1 share of between $40-$100 depending on asset type, and Vanguard doesn't charge a commission to buy its own ETFs.  No annual fees if you enroll in paperless everything.

If you can't afford $1000 to open a Vanguard account, I think Scottrade's minimum is $500 and there may be places with lower minimums, but you'll pay for it in commissions, fees, or sub-par investment opportunities with load/expense ratios.  If you don't have $1,000 I'd say stay away from the market and challenge yourself to put $50-100 into a Cap360 or similar savings accounts until you get to $1,000.

MgoSam

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Re: No minimum Index Fund
« Reply #5 on: June 30, 2014, 08:51:44 AM »
i believe that Vanguard Target Retirement Funds require a $1000, are you able to invest this much? To me, it sounds worthwhile to do so and then autoinvest as often as you can. The most important thing is to get started.

MrWindUpBird

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Re: No minimum Index Fund
« Reply #6 on: June 30, 2014, 11:43:28 AM »
Thanks everyone! the ETF's seem to be much better suited to my financial needs right now