Mechanics of taxable investing at Vangaurd

[Homebrew]

Hi all,

I'd like to start an automatic investment plan at Vanguard. This will be a taxable account that would be $500-1000/month into 3 to 5 funds. First of all, it appears to me that the annual maintenance fees are waived if you sign up for electronic delivery. However, it appears that most of their funds require a minimum of $3000 to start. I know many companies will waive the minimums if you sign up for the automatic investment. Does anyone know if Vanguard will do this? Or do you automatically put money into the money market fund until you get the $3000, then start a fund?
Thanks!

 

[Retire Soon]

You might consider Vanguard Star Fund which has a minumum investment of $1,000. You could add more funds later on. Star is a fund of funds, so you would actually have ownership in 11 funds.

https://personal.vanguard.com/us/funds/snapshot?FundId=0056&FundIntExt=INT

 

[FIREd]

Hi all,

I'd like to start an automatic investment plan at Vanguard. This will be a taxable account that would be $500-1000/month into 3 to 5 funds. First of all, it appears to me that the annual maintenance fees are waived if you sign up for electronic delivery. However, it appears that most of their funds require a minimum of $3000 to start. I know many companies will waive the minimums if you sign up for the automatic investment. Does anyone know if Vanguard will do this? Or do you automatically put money into the money market fund until you get the $3000, then start a fund?
Thanks!

The thing is, even their money market funds require $3000 to start. What you could do is start building some savings in a high interest rate savings account for example and when you reach $3000, then buy one of Vanguard's MMF. Keep adding money to the MMF and when you reach $3500, then leave $500 in the MMF (VG will close your MMF account if the balance drops below $500), and use $3000 to buy your first fund. Then continue adding money to the MMF, until you reach $3500 again, leave $500 in the MMF and use $3000 to buy a second fund. Repeat as many times as needed to open all the funds you want. Then you can start adding money to each fund as needed. That's how I got started with Vanguard.

 

[Homebrew]

Thanks a bunch. I didn't realize the MMF has a minimum also. I think I'll do what you did. I have a USAA MMF currently for my emergency fund. Maybe I'll switch it over to vanguard and start buying the funds as you did. Thanks again.

 

[travelover]

You might consider Vanguard Star Fund which has a minumum investment of $1,000. You could add more funds later on. Star is a fund of funds, so you would actually have ownership in 11 funds.

https://personal.vanguard.com/us/funds/snapshot?FundId=0056&FundIntExt=INT

But STAR fund has 25% bonds - not optimal in a taxable account. I'd go with Firedreamer's plan.

 

[Homebrew]

It's a good thought to try a fund with a low minimum, but I agree with Travelover about the bonds. Also, I've read that a lot of folks direct dividends into the MMF to reinvest rather than automatic reinvestiment. That's another reason to have the MMF.

 

[DblDoc]

Homebrew;

One other consideration is that as a broker Vanguard is not the most competitive in terms of commisions. I use Scottrade ($7 trades) for this reason, others use Wells Fargo which has (had?) free trades.

DD

PS Munich Helles on deck for this weekend

 

[ats5g]

Homebrew;

One other consideration is that as a broker Vanguard is not the most competitive in terms of commisions. I use Scottrade ($7 trades) for this reason, others use Wells Fargo which has (had?) free trades.

DD

PS Munich Helles on deck for this weekend

True, but if only buying Vanguard mutual funds, much cheaper to by them from Vanguard with no transactions costs.

 

[FIREd]

True, but if only buying Vanguard mutual funds, much cheaper to by them from Vanguard with no transactions costs.

Plus many non-Vanguard funds can be purchased at no cost (No Transaction Fee or NTF funds) through Vanguard.

 

[ats5g]

Plus many non-Vanguard funds can be purchased at no cost (No Transaction Fee or NTF funds) through Vanguard.

Non-vanguard funds.... heresy.

 

[FIREd]

Non-vanguard funds.... heresy.

The day Vanguard proposes an International Bond fund and a Market Neutral fund (with a low minimum), I will be glad to put all my money in VG funds. Until then...

 

[DblDoc]

The day Vanguard proposes an International Bond fund and a Market Neutral fund (with a low minimum), I will be glad to put all my money in VG funds. Until then...

And international small cap...

Also I believe they charge commisions on ETF's (even Vanguard ETF's) which for me long term are cheaper then their comparable MF given how I invest.

Not to worry ats5g Vanguard has most of my nestegg

DD