Author Topic: Funds with low initial investment amount?  (Read 2407 times)

melanie2008

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Funds with low initial investment amount?
« on: April 17, 2015, 10:09:27 AM »
Hi.
I am pretty much starting with investing. I have my Roth IRA with fidelity (as well as a 403B-doing very well; 14% returns, 0.66 Expense ratio). I will start a new job and get a 401K with Vanguard. The problem I am finding is that the initial investment is often $10,000 (especially for the funds recommended here) while only a few are $2500 for initial investment. Are there any funds that are lower with fidelity or vanguard? What should I do with the money getting deposited each month until I reach the minimum investment numbers?

Thanks!

MDM

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Re: Funds with low initial investment amount?
« Reply #1 on: April 17, 2015, 10:14:02 AM »
Several good $1000 minimum choices at Vanguard.   See https://investor.vanguard.com/mutual-funds/fees.

Indexer

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Re: Funds with low initial investment amount?
« Reply #2 on: April 17, 2015, 03:49:04 PM »
Based on the $10,000 number I assume you are looking at Vanguard index fund ADMIRAL shares.  Simple solutions.

1.  Use a Vanguard target retirement fund.  Minimum is 1,000, and it is made up of the big total market index funds all in one fund.
2.  Build a portfolio with ETFs.  All the big index funds that are avialable as admiral shares with 10k minimums are also available as ETFs.  With ETFs you only have to have enough to buy 1 share which is normally in the $50-150 range.

Here is a cheat sheet:
VTSAX = VTI
VTIAX = VXUS
VBTLX = BND
VFIAX = VOO

You can actually pull up any Vanguard fund on the website and right under the name in small print look for "Also available as Investor Shares mutual fund and an ETF."  The ETF is a link.  Find the funds you want, and click the ETF button.

seattlecyclone

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Re: Funds with low initial investment amount?
« Reply #3 on: April 18, 2015, 12:50:47 AM »
I've never seen a 401(k) plan that imposed minimum investment amounts on plan participants. Double check that they actually have that requirement; just because Vanguard's admiral funds require a $10k investment for an individual account doesn't mean they'll have any such requirement for inside your 401(k). Heck, I'm invested in Vanguard Institutional Plus class funds in my 401(k) and I have nowhere near the $200 million minimum that Vanguard requires for that fund. :-)

melanie2008

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Re: Funds with low initial investment amount?
« Reply #4 on: April 21, 2015, 06:57:53 PM »
Thanks all! Vanguard is so much easier than fidelity! At least, ER and minimums are much easier to see on a search rather than opening up each link etc. I did find that $2500 is the minimum for Fidelity funds. I told my husband to open a fidelity or vanguard Roth IRA and he opened a fidelity one so I was trying to find something that we can invest in rather than having cash just sit in the account until we accumulate $2500. I told him this. He is going to see if that can be waived if you direct debit so much/so many times a year.

My 401K and new Roth IRA will be with Vanguard so I am all set especially thanks to you all!

forummm

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Re: Funds with low initial investment amount?
« Reply #5 on: April 21, 2015, 07:12:26 PM »
Heck, I'm invested in Vanguard Institutional Plus class funds in my 401(k) and I have nowhere near the $200 million minimum that Vanguard requires for that fund. :-)

Love it.