Author Topic: FUSVX to VTSAX?  (Read 7538 times)

anemone

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FUSVX to VTSAX?
« on: February 20, 2014, 12:24:02 PM »
I am in my mid-20s and new to investing and Mustachianism, but very glad to have found out about it at the start of my money-making career. I have a Vanguard Roth, 100% invested in VTSAX. I also have about $30,000 in a nonretirement Fidelity account, all in FUSVX. I am able to max out my contributions to the Roth each year, with leftover savings to invest in the nonretirement account.

I have read the stock series, and given my age, single status, and preference for spending minimal time thinking about my investments, I am pretty comfortable with the idea of investing 100% of my savings in VTSAX for now, and then re-visiting once I want to start a family, which is probably at least 5 years off, if not more.

Here's my question: Is it a good idea to sell all of my FUSVX shares and use that money to start my nonretirement VTSAX account? Will I have to pay significant taxes on the money earned from selling all my FUSVX shares? Or would I be better off keeping the $30,000 in FUSVX and saving up from scratch to invest in VTSMX, switching to VTSAX once I reach the $10,000 minimum?

Thanks for any advice!

Frankies Girl

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Re: FUSVX to VTSAX?
« Reply #1 on: February 20, 2014, 12:46:33 PM »
If you want to replicate the VTSAX in your Fidelity account without incurring additional fees or closing out and moving the account, take a look at FSTVX. This is the Spartan total stock market index fund, and it performs a bit better than the FUSVX (at least the past performance). FSTVX is the analog for the Vanguard index. ;)

You'd have to speak with an adviser to see what charges would apply for selling off a fund (short term or long term cap gains and the like) but if it's not too expensive, that's where I'd go.

I really like Fidelity and their Spartan series index funds are just as good (and in some cases better) than Vanguard's versions. They have a superior website interface and access to your accounts, and their customer service kicks ass. As long as you aren't going into high expense funds or having professionally managed accounts, it's perfectly possible to keep your account with Fidelity and be happy.

« Last Edit: February 20, 2014, 12:49:39 PM by Frankies Girl »

GlassStash

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Re: FUSVX to VTSAX?
« Reply #2 on: February 20, 2014, 12:58:10 PM »
+1. Fidelity has some great index funds and great customer service (so says the word on the street).

Is there a reason you have so much in a taxable account and not in a 401k? My guess would be that your employer doesn't offer it, but I wanted to make sure.

anemone

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Re: FUSVX to VTSAX?
« Reply #3 on: February 20, 2014, 01:06:25 PM »
Thanks for the advice, Frankies Girl! I will definitely look into FSTVX. And I do prefer Fidelity's website to Vanguard's.

GlassStache, spot on, my employer unfortunately does not offer any retirement plan, though my boss has hinted that might change soon.

GlassStash

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Re: FUSVX to VTSAX?
« Reply #4 on: February 20, 2014, 01:29:46 PM »
Thanks for the advice, Frankies Girl! I will definitely look into FSTVX. And I do prefer Fidelity's website to Vanguard's.

GlassStache, spot on, my employer unfortunately does not offer any retirement plan, though my boss has hinted that might change soon.

That would be huge for you. Also, have you looked into contributing to a Trad'l IRA instead of a Roth? It could be more beneficial in the long run, depending on tax rates, etc.

anemone

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Re: FUSVX to VTSAX?
« Reply #5 on: February 20, 2014, 02:09:53 PM »
Thanks for the advice, Frankies Girl! I will definitely look into FSTVX. And I do prefer Fidelity's website to Vanguard's.

GlassStache, spot on, my employer unfortunately does not offer any retirement plan, though my boss has hinted that might change soon.

That would be huge for you. Also, have you looked into contributing to a Trad'l IRA instead of a Roth? It could be more beneficial in the long run, depending on tax rates, etc.

Yes, I hope it happens, but I'm not counting on it for now. I haven't looked into the Trad'l IRA versus Roth issue very much. I did recently come across this post: http://www.madfientist.com/traditional-ira-vs-roth-ira/ ...It seems like a pretty promising strategy, but I think I need to study up and understand it a bit better before deciding whether it's right for me. Any suggestions for further reading?

GlassStash

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Re: FUSVX to VTSAX?
« Reply #6 on: February 20, 2014, 02:24:11 PM »
Yes, it's definitely important to be knowledgeable and comfortable with the vehicle you're investing in. Along with the MadFientist article I would recommend:

http://www.bogleheads.org/wiki/Traditional_IRA
http://www.bogleheads.org/wiki/Roth_IRA
http://www.bogleheads.org/wiki/Traditional_versus_Roth
http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

Bogleheads wikis are always my go to. The last article discusses how to withdraw from these accounts early, which I think is relevant to your decision.

Happy reading!