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A $2000 Roth
Old 11-03-2005, 05:06 PM   #1
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A $2000 Roth

A friend wants to start a $2000 Roth, and contribute maybe $1000 more per year. So, it'll be about a year before it hits $3000, if returns were 0%.

Would be great if there were a company offering index funds with low fees and minimums, but I don't know of one.

Am thinking of suggesting working to have 3 ETF holdings, eventually:

VTI or VV Vanguard Total Market Index or Largecap.
EFA ishares EAFE index
VWO Vanguard EM Index

Maybe, $1200 VTI and $800 EFA today.
When save up 18% (or perhaps more) of existing Roth value, put that into VWO.

Will then have, depending on returns, about
50% VTI
35% EFA
15% VWO (more if overallotted temporarily, to save on commissions)

And would have spent $21 on commissions at $7/trade.

From there, can put into whichever is most under target %, but transactions no smaller than $1000, to keep commissions low.

Better ideas??

Even if he had $3000 today, that would only be enough for one Vanguard fund.
Even if he had $6000 today, and split equally between Total (US) Stock index and Total International index, Vanguard would charge $40 a year in fees, worse than commissions+spread using ETFs.

(it's acutally a relative of my girlfriend. He trusts her & is letting her call all the shots. I'm helping advise her.)
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Re: A $2000 Roth
Old 11-03-2005, 05:09 PM   #2
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Re: A $2000 Roth

If he had $3000, he could get into Lifestrategy growth or target retirement 2045 - similar in nature to your target portfolio. $10/yr fees.
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Re: A $2000 Roth
Old 11-03-2005, 07:43 PM   #3
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Re: A $2000 Roth

a VG roth is only 1k minumum
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Re: A $2000 Roth
Old 11-04-2005, 11:44 AM   #4
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Re: A $2000 Roth

Thanks Justin, 2045 might be appropriate when reach $3K, if they're willing to hold some bonds, and be that US-centric.

fed, they raised the minimum. Star fund has low minimum, but I don't reccommend it.
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Re: A $2000 Roth
Old 11-04-2005, 12:32 PM   #5
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Re: A $2000 Roth

Just this week Vanguard has standardized all their fund minimums (retirement accts included) at $3000.

The only exception is the STAR fund which remains at $1000 minimum investment.
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Re: A $2000 Roth
Old 11-04-2005, 02:44 PM   #6
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Re: A $2000 Roth

They must've raised them in the last week, because it was 1000 on 10-26 wehn I opened an IRA (I opened it with ove 3k, but I remember that 1k was the min on ALL retirement accts)

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Re: A $2000 Roth
Old 11-04-2005, 02:46 PM   #7
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Re: A $2000 Roth

whaddaya know! I went to the site and looked and bamm...3k even for retirement accounts.

I opened up an accoutn with 2 different funds, each under 3k about a week ago.

must've been a NOV 1 change....
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Re: A $2000 Roth
Old 11-04-2005, 02:51 PM   #8
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Re: A $2000 Roth

Quote:
Originally Posted by thefed
must've been a NOV 1 change....
Correct.
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Re: A $2000 Roth
Old 11-08-2005, 04:09 PM   #9
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Re: A $2000 Roth

Wow, glad I got in under the clock. I opened mine about two weeks ago with the $1K minimum too.
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