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ntan1 posted:It used to be considered good. But you can always do better than that. How much attention do you think it would take for me to perform better, or to put it a better way, how badly would I have to screw that up in order to perform worse than the .3% difference in expenses?
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Jun 26, 2013 01:48
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It'd be something you would need to check once a year, if that.
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Jun 26, 2013 02:12
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Harry posted:It'd be something you would need to check once a year, if that. Interesting, thanks for the advice I'll have to look into that!
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Jun 26, 2013 02:24
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ntan1 posted:I strongly disagree with percentage fee based CFPs. For the amount of money that you could potentially save up without having a .45% percentage based CFP, it's simply so much better to do a single charge, learn how to invest, and then invest on your own. For the record I agree, I am a big advocate of spending a little time to learn the basics and doing it on your own. It is what I do personally and would recommend first to everyone. However for someone with a large income/tax bracket ($100k+/year) and a lot of assets ($500k+ excluding home equity) who has no interest or desire to continually rebalance, manage tax efficiency, harvest tax loses, etc - a percentage fee based CFP is probably their best option. The gains from a properly managed portfolio instead of one that sits there neglected probably exceeds the CFP cost in the long run.
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Jun 26, 2013 04:05
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Ok, so I'm looking at Fidelity's other funds to see if I can cut expenses by creating a balanced mix myself, but most of the other options have even higher expense ratios than the target fund, from what I can see. ntan1, you seemed to be thinking of a few funds in specific that had lower expense ratios; can you share what those would be? edit: The only fund that really seems to have lower expense ratios is the FXSIX "Spartan 500" fund which appears to be more or less the S&P 500? Would that represent as much diversification as the stock portion of my target fund? SlightlyMadman fucked around with this message at 16:07 on Jun 26, 2013 |
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Jun 26, 2013 15:55
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SlightlyMadman posted:Ok, so I'm looking at Fidelity's other funds to see if I can cut expenses by creating a balanced mix myself, but most of the other options have even higher expense ratios than the target fund, from what I can see. ntan1, you seemed to be thinking of a few funds in specific that had lower expense ratios; can you share what those would be? Look harder. Every Fidelity INDEX fund has the same or lower expense ratio than Vanguard. There are at least a dozen. Edit: links to bond index, international index, and domestic index. Each link contains a good half dozen or so of index funds in that category. Most people can roll any portfolio they need with these. http://fundresearch.fidelity.com/mutual-funds/category-performance-daily-pricing-yields/BNDIDX http://fundresearch.fidelity.com/mutual-funds/category-performance-daily-pricing-yields/INTIDX http://fundresearch.fidelity.com/mutual-funds/category-performance-daily-pricing-yields/STKIDX 80k fucked around with this message at 17:20 on Jun 26, 2013 |
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Jun 26, 2013 17:12
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This all the options I see, other than the target funds: FID GROWTH CO K (FGCKX) - 0.77% INVS COMSTOCK Y (ACSDX) - 0.63% SPTN 500 INDEX INST (FXSIX) - 0.05% VICTORY DIVRSD STK I (VDSIX) - 0.82% ARTISAN MID CAP INST (APHMX) - 1.08% BARON GROWTH INST (BGRIX) - 1.06% PERKINS MID CP VAL I (JMVAX) - 0.73% LD ABBETT SMCPVAL I (LRSYX) - 0.93% ROYCE LOW PR STK IS (RLPIX) - 1.19% FID DIVERSIFD INTL K (FDIKX) - 0.84% FID FREEDOM K INCOME (FFKAX) - 0.39% PIM ALL ASSET INST (PAAIX) - 0.96% MIP CL 1 - 0.71% FID INFLAT PROT BOND (FINPX) - 0.45% PIM TOTAL RT INST (PTTRX) - 0.46% FID RETIRE MMKT (FRTXX) - 0.42% Of those, the only funds I see with lower expenses than my target fund are: SPTN 500 INDEX INST (FXSIX) - 0.05% FID FREEDOM K INCOME (FFKAX) - 0.39% FID INFLAT PROT BOND (FINPX) - 0.45% PIM TOTAL RT INST (PTTRX) - 0.46% FID RETIRE MMKT (FRTXX) - 0.42% Those are mostly bond funds though. edit: It looks like you're seeing more funds than I am. Is the issue maybe that my employer for some reason only has a small subset of funds available? SlightlyMadman fucked around with this message at 17:24 on Jun 26, 2013 |
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Jun 26, 2013 17:22
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Not sure what your question is then? It doesn't matter if I or anyone else know of Fidelity funds that are lower expense ratio if you're talking about a 401(k) plan or other plan with limited choices. Those are your only choices. You can just limit what you invest in that plan, and open a personal IRA account at Vanguard or Fidelity and invest in lower expense ratio funds there.
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Jun 26, 2013 17:25
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Ok, yeah I was just responding to a suggestion that I shouldn't be using the target fund because there should be better options available. In looking at my options that appears to not be true, so I'll stick with the target fund. Thanks for looking into it!
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Jun 26, 2013 17:34
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Fidelity has some really good rates on their (spartan?) rated funds, but I think those require maybe 10K to get in on them? It used to be 100K but they just recently dropped it to 10. Maybe someday I can throw around money like that into funds.  All in due time I suppose.
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Jun 26, 2013 18:22
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If I were to compare Vanguard Admiral funds to the Fidelity Spartan funds, what are the most important factors to compare?
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Jun 26, 2013 18:37
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BotchedLobotomy posted:Fidelity has some really good rates on their (spartan?) rated funds, but I think those require maybe 10K to get in on them? It used to be 100K but they just recently dropped it to 10. Maybe someday I can throw around money like that into funds. Investor class are $2,500 minimum. Advantage class are $10,000 minimum. Similar to Vanguard investor vs admiral. Mouse Cadet posted:If I were to compare Vanguard Admiral funds to the Fidelity Spartan funds, what are the most important factors to compare? Honestly, I would still go with Vanguard. I have not looked at the fidelity prospectuses in a while, but last I saw, these low expense ratios are operating as loss leaders. I would rather go with an organization that has actually reduced their cost to be competitive, as it is more sustainable. There are other organizational issues that impact shareholder value other than the expense ratio, like securities lending policies, soft dollars practice, etc. Vanguard is really a good choice with all things in perspective.
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Jun 26, 2013 18:44
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Mouse Cadet posted:If I were to compare Vanguard Admiral funds to the Fidelity Spartan funds, what are the most important factors to compare? For passive funds, two main things: 1) Expense Ratio, the percent you pay per year to the brokerage 2) Redemption Fees, the percent you pay when you withdraw your contributions 3) Other organizational issue (as 80k mentioned) I'd go with Vanguard for the same reason as 80k mentioned. Vanguard's cost is very low, reasonable, and they are trustworthy and effective as a company. On the subject of your 401k: you're right about your 401k having limited options  . Here's how the Target fund, likely for your year, is structured:10% Bond Market 63% US Stock Market 27% International Stock Market The Spartan 500 Index is a good index and is often part of a full portfolio. However, it's not a complete picture. Basically, the Spartan 500 Index is a partial mirror of the US stock market. Let me explain: 65% Spartan 500 Index Fund 35% Spartan Extended Market Index Fund The sum of these together is a full representation of the US Stock Market. So, reaching back to how to have similar diversity to the target fund, you would need something like the following to have the same diversity as the Target Retirement fund. 10% Bond Market 41% Spartan 500 Index Fund 22% Spartan Extended Market Index Fund 27% International Stock Market You could try working out magic by using your other retirement accounts to invest in the stuff that isn't the 500 Index Fund, of which the IRA definitely has better fund selection. But, for the sake of keeping things simple, I'd be inclined to say that you should keep things in the Target Retirement XX funds until you have the time to read one of the investment books in the OP and have deeper understanding of investing.
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Jun 26, 2013 20:39
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I really hate to ask this since it's probably been asked 100s of times in here and even looks like it's being somewhat discussed on this very page, but: I just got a ton of money from the VA due to disability (100% and backpay) and I really don't have any idea what to do with it. I spoke with my brother and he said that I should at least start up a Roth IRA. Sounds like a pretty simple and imporant thing to get started in. I'll probably branch out from there by setting up a brokerage account and dabble with mutual funds and stuff (not even sure if I'm saying the right things here). Either way, I want to start a Roth IRA but my main concern is what online brokerage to start with. My brother told me to use Charles Schwab, but after looking online it looks like E*Trade seems to be a good place for beginners. Skimming through this thread however, it seems a lot of you guys are using Vanguard. Sorry for being an idiot about this but I'm truly ignorant in this subject. Anyone have any suggestions for a beginner? My money isn't doing much in my 0.25% savings account. 
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Jun 26, 2013 23:08
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You have to have earned income to start an IRA fyi, not sure if this applies to you. Also read the thread title.
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Jun 26, 2013 23:14
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Hah, didn't notice the title. So scratch that one. Yeah, not sure if disability counts as earned income. That's a good question that I need to look into. That would be pretty lovely if I can't get an IRA. Hopefully I could still invest in other ways. Edit: From what I could see from non-official sources, disability does not qualify for an IRA. gently caress. My. rear end. Pennywise the Frown fucked around with this message at 23:39 on Jun 26, 2013 |
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Jun 26, 2013 23:22
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The reason why ETRADE is a bad idea is because they have fees for literally everything: buying things, selling things, percentage yearly fees, minimums, fees to close your goddamn account, maintenance yearly fees, etc. Schwab is meh, but Vanguard has better index funds, low expense ratios, and the only fee they charge can be waived by using electronic statements. Before investing, make sure that you have 6 months of expenses as an emergency fund. If you are currently not employed, then I recommend more than 6 months (12 months instead), unless you are in school and expect to have a job upon graduation. For the rest of the money, keep reading below First, check to see if you have any loans. If you do, any any are greater than 5% (As a baseline), I'd personally recommend using the money on those first. Even if your loans are lower than 5%, it may still be wise to pay those off. For the rest of the money, keep reading below. For the rest of the money, when do you expect to use it? If it's within 5 or so years, then investing in anything risky is probably a bad idea. Put it into money market, savings, or something that earns the highest interest possible but is completely safe and not very liquid. Are you planning on using your expenses for schooling or other in the future? Then you may qualify for some sort of tax advantaged account. Otherwise, you're likely investing for retirement. If you can't put money into an IRA, then it will be taxable. In either case, I strongly recommend opening up an account with Vanguard, mainly because they are the least likely to rip you off and spam you. For said money, determine an asset allocation (percentage of money in stocks, bonds, and hard cash). If you are lazy and are saving up for retirement, then the easiest thing to do is put all of the money into the Target Retirement 20XX fund for your year. There may be some smaller, better, but nitpicky things you might be able to do, but let's start here for now. Don't take the money out. If the stocks crash, don't take the money out. If the stocks go up, don't take the money out. If a CEO tells you to take the money out, don't take the money out. If you lose your job, hopefully you have that emergency fund, so you don't have to take the money out. If a civil war breaks out in the US or everybody in the world is dying because of a nuclear bomb, well then maybe you might want to do something, but otherwise don't take the money out. ntan1 fucked around with this message at 01:14 on Jun 27, 2013 |
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Jun 27, 2013 01:11
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Harry posted:You don't have the kind of money that would make it worth it. Since you haven't mentioned it yet, look at the three fund portfolio that Bogleheads endorse. They're more on your level of financial standing and advocate this. The main benefit from financial planners is avoiding taxes or reducing money that would be at a 35% rate to something like a 15% or 20% rate. I'm thinking: 40% Short Term Bond Index Admiral VBIRX 30% Total Stock Market Index Admiral VTSAX 30% Developed Markets Index Admiral VDMAX Vanguard Wellington Fund Admiral (VWENX) also looks interesting, but there's no point in investing in bonds and the total stock market and the Wellington fund.
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Jun 27, 2013 02:18
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Little high in international, but should be okay. Check this one out for where you should be buying everything. Basically, keep your bond funds in tax advantaged accounts while your normal brokerage should have the total market funds.
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Jun 27, 2013 02:20
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Mouse Cadet posted:I'm thinking:
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Jun 27, 2013 03:43
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Pennywise the Frown posted:I just got a ton of money from the VA due to disability (100% and backpay) and I really don't have any idea what to do with it. Don't be in a rush to do anything. Park it all in a savings or money market account and start buying some books from the OP. Once you know what an 'asset allocation' is, you can start considering doing stuff with your money; but you should probably wait and keep reading, even then. There's no rush, investing is a very long marathon, not a sprint.
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Jun 27, 2013 03:57
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gvibes posted:Any reason why you aren't doing total international/total bond? I was considering FTSE All-World ex-US Index Fund Admiral but I don't know if that's considered a total int'l fund.
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Jun 27, 2013 04:05
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Thanks for the advice, sounds like ETRADE really does suck. I got $65,000 for my disability back pay just sitting in my savings right now as well as a respectable amount coming in each month. I have zero debt now and have a few payments like car insurance, cell phone, and a very small rent charge. I live with my parents currently since I'm bipolar and had a few extreme "episodes" so that I can't work at the moment.  I don't have any major plans for the money so far. I'd like to get an apartment sometime when I'm stable and eventually I'll need a new car. However I have a 1997 Toyota Camry so it might be a long time before that thing dies. I'd also like to try school again in the near future to finish my degree or start a new one... but baby steps you know. I'm really nervous about getting into this so I was just thinking of starting with $10,000 so I have enough for school, a car, and an apartment in the future. I'll look more into Vanguard and see how they work.
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Jun 27, 2013 04:08
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So I have Vanguard through my employer. After watching http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/ I moved my funds from whatever the retirement 2050 fund was to: Vanguard Institutional Index Fund Institutional Shares (VINIX) This is the type of index fund the video recommend right? Does BFC recommend maxing out my Roth 401k or paying off a mortgage first?
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Jun 27, 2013 06:58
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KingFisher posted:So I have Vanguard through my employer. Partially, but let me answer your question in the larger context, since this is something you should probably know about. I assume you were investing in the Vanguard retirement 2050 fund originally. This fund is actually considered one of the best retirement diversified funds, with low expense ratios. The video you are looking at is right that many target retirement funds are crafty and have high expenses, but the Vanguard retirement 2050 is explicitly not one of those, and is an OK option if you're lazy and want Vanguard to do the work for you. In fact, the owner of Vanguard is the main person who explains why people are getting screwed out of retirement in that video. The target retirement fund for Vanguard is explicitly a collection of 3 passive index funds, all of which have low expense ratios. What's your expense ratio for the Target Retirement funds? Now, on the subject of the Institutional Index Fund, I assume you looked at the expense ratio of VINIX and saw it was the lowest. You're right that VINIX is a good passive fund with low expensive ratios that makes sense to hold in a profile, but you need more than that. Given that you have an employer retirement plan with institutional shares, I'm willing to guess you have a pretty good 401k. Do you have all of these these funds? 42% Vanguard Institutional Index Fund Institutional Shares (VINIX) 21% Vanguard Extended Market Index Fund (VIEIX) 10% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) 27% Vanguard Total Stock Market Index Fund Institutional Shares (VITSX) If so, then a good diverse strategy with minimal fees that invests in only passive index funds would be the above. For something like this, you'll need to balance each year. If you don't have this selection of funds, then feel free to list out the Vanguard funds you do have access to, and we can answer your questions well. quote:Does BFC recommend maxing out my Roth 401k or paying off a mortgage first? If your interest rate is high, then mortgage first. If your retirement accounts are set and generously above what you expect you'll need, then possibly mortgage. Otherwise, if you are pretty much stable, then it may make sense to max out retirement counts. Depends if you like holding onto debt.
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Jun 27, 2013 07:43
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Ok, I signed up at Vanguard and threw $10,000 in it. It will take a while for the money to post yet. This initial investment is for retirement so I'm planning on getting a mutual fund. It recommended me the Vanguard LifeStrategy Growth Fund (VASGX) according to the risk assessment thing. Should I stick with this one fund and just never touch it? I plan on doing more in the future with another set of investment money. I just want this one to be a safe, long term investment. Also sorry for being so uneducated about this. I just decided to say "gently caress it" and jump in or else I would end up never doing anything.
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Jun 27, 2013 16:14
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Pennywise the Frown posted:Ok, I signed up at Vanguard and threw $10,000 in it. It will take a while for the money to post yet. This initial investment is for retirement so I'm planning on getting a mutual fund. It recommended me the Vanguard LifeStrategy Growth Fund (VASGX) according to the risk assessment thing. Should I stick with this one fund and just never touch it? Invest $20 in http://www.amazon.com/The-Four-Pillars-Investing-Portfolio/dp/0071747052
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Jun 27, 2013 16:51
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You can just get it from the library, no need to spend $20 on any kind of personal finance book. The library keeps updated copies, too, so when you go back to reread them five years later nothing will be out of date.
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Jun 27, 2013 17:07
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Pennywise the Frown posted:Ok, I signed up at Vanguard and threw $10,000 in it. It will take a while for the money to post yet. This initial investment is for retirement so I'm planning on getting a mutual fund. It recommended me the Vanguard LifeStrategy Growth Fund (VASGX) according to the risk assessment thing. Should I stick with this one fund and just never touch it? It's a safe strategy long term, where long term is 20 years or more. In the overview section, you can see that this fund is a mix of a different set of funds: https://personal.vanguard.com/us/funds/snapshot?FundId=0122&FundIntExt=INT#tab=0 1 Vanguard Total Stock Market Index Fund Investor Shares 56.6% 2 Vanguard Total International Stock Index Fund Investor Shares 23.5% 3 Vanguard Total Bond Market II Index Fund Investor Shares† 16.0% 4 Vanguard Total International Bond Index Fund Investors Shares 3.9% That is a decent allocation. To learn why, as Unormal said, I strongly recommend reading four pillars.
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Jun 27, 2013 18:59
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Yeah, I should really look into getting that book. Once I learn a bit more about Vanguard and investing in general I'm eventually going to put in more money for short term investing, like for buying a house some day or something of that sort. I guess I'm going to throw the whole $10,000 into the VASGX once my money posts since this is what I'm setting up for my retirement (if I live that long). BTW, I really appreciate the advice.
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Jun 27, 2013 19:47
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Sorry for all of the dumb questions but my money already posted today. Do you guys recommend I throw the whole $10,000 into that one VASGX fund, or should I get some others just in case? Edit- Turns out that I truly am an idiot. I tried purchasing $8000 of the VASGX and accidentally bought $8000 MORE of the money market fund.  I eventually got it straightened out and bought the $8000 of the VASGX, but now I have another $8000 coming in to invest with. I guess I'll take that extra money and invest in some other riskier fund. Any ideas of where else to put this extra money in a shorter term fund for someone who is borderline retarded? Pennywise the Frown fucked around with this message at 17:05 on Jun 28, 2013 |
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Jun 28, 2013 16:09
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Pennywise the Frown posted:Sorry for all of the dumb questions but my money already posted today. Do you guys recommend I throw the whole $10,000 into that one VASGX fund, or should I get some others just in case? Please stop putting your money any place other than your money market fund and educate yourself. 
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Jun 28, 2013 18:50
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Unormal posted:Please stop putting your money any place other than your money market fund and educate yourself. I didn't think I would get a good return on the money market fund, but then again I don't know poo poo. I'll have to work on the educating myself thing. I just thought the money market fund was a holding place, sort of like a savings accout, where I use that money to invest in mutual funds, stocks, etc. Pennywise the Frown fucked around with this message at 18:59 on Jun 28, 2013 |
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Jun 28, 2013 18:56
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Pennywise the Frown posted:I just thought the money market fund was a holding place, sort of like a savings accout, where I use that money to invest in mutual funds, stocks, etc. You are correct, it is, and that makes it the perfect place for all of your money until you have an actual plan in place.
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Jun 28, 2013 21:07
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You can maybe try Betterment, which might be a good way to enter investing without much risk. You essentially choose your stock to bond ratio and they use Vanguard funds to make you money. You can withdraw at any time with no fee, which is a big plus, so if you do change your mind, you will hopefully have made a little change.
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Jun 28, 2013 21:44
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ETB posted:You can maybe try Betterment, which might be a good way to enter investing without much risk. You essentially choose your stock to bond ratio and they use Vanguard funds to make you money. This just seems like a middleman that charges you non-insignificant fees just because they have you fill out a risk assessment survey. There are a bunch of free ones online, and you can invest in Vanguard funds yourself once you know what your risk profile looks like.
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Jun 28, 2013 22:53
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Unormal posted:You are correct, it is, and that makes it the perfect place for all of your money until you have an actual plan in place. Correct. Pennywise, the biggest danger to investing is yourself. This is the same for everyone. I've given a brief summary of my advice on what a good investment portfolio would be, but as it has been said above, you need to protect yourself by learning the math and sense behind it yourself.
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Jun 28, 2013 22:59
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You guys are making a lot of sense. I'm going to pick up that book before I do anything else stupid. Thanks for going easy on me. Edit - Got the book from a local library. Pennywise the Frown fucked around with this message at 18:03 on Jun 29, 2013 |
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Jun 28, 2013 23:16
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I have gotten my first real job! With benefits and everything! My company matches 50% of my contribution up to 3%. If I contribute my 6% with the company matching that would make for a 9% contribution. My question is should I go with my employer retirement plan or should I keep this money and invest it independently? For reference, I am a 27 year old single female, with no children and I own my home. My average starting yearly salary will be $45,000. I have enclosed the few documents that I have received about this plan. I have no experience with investing and presently have no retirement or savings.  
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Jun 30, 2013 04:51
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1) You definitely want to get the whole employer match, so setting that up should be the first thing you should do. You contributing 6% is a good starting place for now. You don't have the best of options to pick from, but there isn't anything you can do about it, and its still way better to go with them while your getting match. You can either put 100% into one of the Retirement 20XX funds, which are balanced for you, or make your own balance, something like 40% VIFSX, 30% VISGX and 30% RWIEX. You have to pay a little more attention to it, but in turn pay lower fees by doing the balance yourself. Your life situation sounds like heavily aggressive is right for you. 2) At the same time, you should start to setup some emergency savings in a regular bank/union savings account. The recommended amount is 6 months of living expenses. 3) Third, look into opening an IRA, Vanguard is a great place to do it. IRAs give you all the tax advantages of 401ks, but with no restriction on what funds you can buy. You will probably be solidly in the 15% tax braket unless you have a lot of other income so a Roth IRA is the type you want to make. You can put up to 5.5k a year into an IRA at the moment. 4) If you've done all the above, and still have more money to save, then increase your 401k percentage.
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Jun 30, 2013 05:57
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