Just mailed my first check to Vanguard

[rsofiantexas]

$10,000 for VTSAX - Eeeeek!!!  I'm 31 years - it's time to get this party started.

I've always had "just one more thing to save for" and "THEN I'd invest"...  Today I'm putting all of it on hold and finally investing.  I didn't read that whole Boglehead book for nothing!

[amha]

CONGRATULATIONS!!! That's an investment that will pay dividends for years to come... literally ;)

Welcome to the club. We're so glad you're here!

[Grateful Stache]

Good for you!

[rsofiantexas]

Thank you! 

[timmoney]

good for you!!!  congrats on saving 10gs and putting it to work.  not to be a joykill but if it was me in the future i'd invest incrementally. for instance im thinking it was probably $2500 to open the account at vanguard. i would've done that then followed the market and when the market was down say 1-2% from my first buy i'd send 500- 1000 and when it was down 1-2% from there i'd send another 500-1000. that way im dollar cost averaging down. the market gyrates. use the gyrations. after all gyrations feel good. 
    i wouldnt be kicking myself for throwing 10gs at it like you did though. with patience and time and reinvesting of dividends you're going to do very very well.  i just wouldve done it a little different. that's my two cents and thats probably what its worth but who knows.
   ok see ya.

[erutio]

Good for you, congrats!  Now ignore that account and don't pay attention to its value for years!

[NewStachian]

Forgive us. On this forum we're a bunch of optimizers. Every good plan can see improvements and we sometimes focus too much on them. What you just did is awesome, and here's how I'd keep going:

The real power of investing is in dollar-cost-averaging. Dumping a large amount into the market at once is riskier than investing over time. While it is definitely 100% awesome that you put money in now, you will REALLY be kicking those investments in the ass if you setup and automatic allotment to transfer to your Vanguard monthly. Even if it's only $100 a month to start, it will be huge.

Here's what dollar-cost-averaging does: By investing the same amount each month, you will be buying fewer shares at higher prices and more shares at lower prices. If the market dips, you're stockpiling more and more shares at low prices. If the stock goes up, you're throttling back the number of shares. This is why many of us on the MMM forum LOVE IT when the market goes down. It means that month's contribution is much more efficient. When I start throwing around large chunks of money (like when I do an old-employer rollover) I get nervous about market timing, start second guessing myself, etc, etc.

It is also a very hands-off way to invest. Once you setup the transfer and set it to monthly recurring, here's what you're doing:

1) Automating something you might be too busy to remember to do on a monthly basis
2) Turning market fluctuations into more $$$ in your pocket
3) Forcing yourself to save this much, which will make you more aware of your spending
3) Allowing yourself to see EXACTLY how much money you're saving. As you flex your frugality muscle and track your spending you'll start to see your costs go down. You may start saying "Wow, I just cut my monthly expenses by $500. Why am I ONLY putting $100 into my Vanguard?" Since you're allotment is setup, you can easily throttle it up to $600 from $100. Now, you can plug your new value in and see your savings rate skyrocket. Then it becomes addicting and you want to get your savings rate as high as you can ;)

Stay motivated with this process. If you need some reinforcement, come back to this forum. That's what I do!

[danclarkie]

Forgive us. On this forum we're a bunch of optimizers. Every good plan can see improvements and we sometimes focus too much on them. What you just did is awesome, and here's how I'd keep going:

The real power of investing is in dollar-cost-averaging. Dumping a large amount into the market at once is riskier than investing over time. While it is definitely 100% awesome that you put money in now, you will REALLY be kicking those investments in the ass if you setup and automatic allotment to transfer to your Vanguard monthly. Even if it's only $100 a month to start, it will be huge.

Here's what dollar-cost-averaging does: By investing the same amount each month, you will be buying fewer shares at higher prices and more shares at lower prices. If the market dips, you're stockpiling more and more shares at low prices. If the stock goes up, you're throttling back the number of shares. This is why many of us on the MMM forum LOVE IT when the market goes down. It means that month's contribution is much more efficient. When I start throwing around large chunks of money (like when I do an old-employer rollover) I get nervous about market timing, start second guessing myself, etc, etc.

It is also a very hands-off way to invest. Once you setup the transfer and set it to monthly recurring, here's what you're doing:

1) Automating something you might be too busy to remember to do on a monthly basis
2) Turning market fluctuations into more $$$ in your pocket
3) Forcing yourself to save this much, which will make you more aware of your spending
3) Allowing yourself to see EXACTLY how much money you're saving. As you flex your frugality muscle and track your spending you'll start to see your costs go down. You may start saying "Wow, I just cut my monthly expenses by $500. Why am I ONLY putting $100 into my Vanguard?" Since you're allotment is setup, you can easily throttle it up to $600 from $100. Now, you can plug your new value in and see your savings rate skyrocket. Then it becomes addicting and you want to get your savings rate as high as you can ;)

Stay motivated with this process. If you need some reinforcement, come back to this forum. That's what I do!

Lump sum investments have been shown to be more efficient over a long time frame:

"For a completely rational investor, lump sum investing will always produce a higher expected return, because it immediately moves your funds from asset classes with lower expected returns to ones with higher expected returns. Note that higher expected returns do not guarantee that your actual returns will be higher. According to an investopedia article, [6] studies indicate that lump sum investing has produced higher returns 66% of the time."

http://www.bogleheads.org/wiki/Dollar_cost_averaging

[Fitzy]

$10,000 is the minimum to open VTSAX admiral shares at Vanguard.

[NewStachian]

Lump sum investments have been shown to be more efficient over a long time frame:

"For a completely rational investor, lump sum investing will always produce a higher expected return, because it immediately moves your funds from asset classes with lower expected returns to ones with higher expected returns. Note that higher expected returns do not guarantee that your actual returns will be higher. According to an investopedia article, [6] studies indicate that lump sum investing has produced higher returns 66% of the time."

http://www.bogleheads.org/wiki/Dollar_cost_averaging

My appologies for not being  more precise with my wording. Yes, if you have X today, invest X today instead of X/12 over the next 12 months.

I was thinking about putting future processes in place: invest $100 each month starting today instead of $1200 at the end of the year.

[imbros]

$10,000 for VTSAX - Eeeeek!!!  I'm 31 years - it's time to get this party started.

I've always had "just one more thing to save for" and "THEN I'd invest"...  Today I'm putting all of it on hold and finally investing.  I didn't read that whole Boglehead book for nothing!

Congrats!

You are already maxing out your RothIRA/tIRA I assume?

[skyrefuge]

Congratulations!

But, "mailed a check"? Have we gone back to 1950? Or was there some reason you couldn't do an ACH transfer directly from your bank account? (it's been a long time since I opened a new account at Vanguard, maybe you have to do it that way the first time?)

If you want to spend money on a stamp, I guess that's your business, but paying the person at Vanguard to open your envelope and process the check is costing *me* (and every other Vanguard investor) 0.00000000000000001% on our returns!  Grrrr!  :-)

[ZiziPB]

but paying the person at Vanguard to open your envelope and process the check is costing *me* (and every other Vanguard investor) 0.00000000000000001% on our returns

It would probably cost twice as much to set up an ACH transfer ;-)  The banking system in this country is so far behind the rest of the civilized world! 

I recently opened a CD at Ally Bank and decided that it would be easier to transfer my funds by ACH from my regular bank.  Well, not so fast.  First, I needed to visit my bank in person to transfer the funds from a maturing CD to my checking account.  Then a call with Ally, then a few days for Ally and my bank to establish a "connection" (done by a couple of trial deposits and withdrawals of a few cents), then another couple of days for my bank account to be approved, and then finally I was able to do the transfer.  Whew!  That literally took a week, a couple of gallons of gas, a few hours of my time and several phonecalls.  It would have been much easier to send a check.  And the same transaction in Europe?  Would have taken a few clicks and less than a minute on line!

[NewStachian]

If you want to spend money on a stamp, I guess that's your business, but paying the person at Vanguard to open your envelope and process the check is costing *me* (and every other Vanguard investor) 0.00000000000000001% on our returns!  Grrrr!  :-)

That's why I've been holding off on putting my money in Vanguard. Now that we're through that, my check's in the mail.

[2527]

Way to go.  Keep us posted.

[Will]

$10,000 is the minimum to open VTSAX admiral shares at Vanguard.

True, but it still probably would've been better to open as Investor shares $7000 ago and then convert it at the $10000 mark.