Newbie question(s)!

[devo]

Ok,
Based upon all the reading I've done on this board, I've decided to open a Roth IRA. I'll only be funding it a bit at a time. I'll be starting with 2% of my salary and then an additional 2% each year until I work up to the max. Until now all of my market investments have been through 401k, or 403b type vehicles where I could continuously DCA in without paying commissions or fees. How do I invest in a Roth account without having to buy in every month? Am I missing something? Do I just save into a MM until I'm ready to buy in? Then I lose the DCA effect.

Also,
In looking at the Vanguard site, there are two types of accounts that I can open, one being a Vanguard only account, the other a more full service brokerage. I can't seem to find a list of differences between these two in terms of fees or otherwise. Any preferences there?

Any asset classes that are better off in a Roth?

I know, a bunch of questions, but I went to open the account the other day and wasn't sure I was going down the right path.

thanks,
d

 

[mickeyd]

Hey d,

Welcome to the board. You will receive some good advice here. Remember that it's value may be worth what you pay for it.

You are correct to realize that a Roth IRA seems to be a smart way to save, especially for a young investor.

I'm a bit confused as to what your question is but I'll guess that you do not have the necessary funds saved in a taxable account in order to fund the Roth. Say you make $50k/annually and you want to start with 2% each year into thr Roth, that would be $1000 annually. With Vanguard you only have one choice due to their $3000 mininum and that would be the STAR account ($1000 min). 

If you do not have the $1000 readily available to start the STAR account, I would save up enough in a MMF or savings account and when you reach $1000 take it out and send it to Vanguard to start the Roth. You will lose the DCA effect that you refer to, but you will gain the "lump sum" affect which is better in a rising market. But, with only $1000, either way will have a minumum affect over the long run if the account increases to 6 or 7 figures.

You have many good questions in your post, I'll just address this one, but I'm sure others will have excellent ideas.