Newbie Investor

[Erndiggs]

I'm a new graduate, and i haven't found that dream career after college so i'm stuck with a job..... pays the bills but not what i want forever,

Anyways i want to start investing, i have about 2000 saved and will invest 200 every month until i get a new job and invest more......

Where should i start???? any help will be appreciated

[KGeary]

First I would make sure that you are out of debt and have an emergency fund saved of three to six months of expenses.

If you've gotten that far, then you're safe to start investing.

I love Vanguard's low cost high performing index funds. The only problem is that you need $3000 to open one. It shouldn't take you long at all. Put your $2000 in a money market savings account and add the monthly amounts to it until you reach $3000. Then I would go to Vanguard.com and open a Roth IRA with them and invest that $3000 into their total market index. I would then continue saving in the money market account until you reach another $3000 and purchase another one of their index funds and start to diversify a little bit. You are only going to need two or three funds total (maybe four). Once you have all the funds you need, just use their automatic deposit program to add to them monthly in amounts that will get you the percentage mix you're looking for.

Do not invest in single stocks. You can invest in other mutual funds, but index funds usually outperform actively managed funds and Vanguard has the lowest expense ratios of anyone.

[MaxPowers]

Look at Fidelity or T Rowe price. They don't have high minimums, so you could start with them. Have 200 a month going into one of their funds, then in 6 months or whatever, take $3k to Vanguard, but keep the 200 a month going, then in a 15 months or whatever, start another Vanguard fund. Getting those first couple Vanguard funds started is a little tough. I got 2, working on 3rd.

does the $3000 minimum count for ETFs also? If I want to use something like zecco to invest in i Vanguard ETF, would you still need 3000?
Also, what is the diffrence b/w Vanguard total stock market (VTSMX) and Vanguard Index 500 (VFINX)? They seem like basically the same thing.

[noppenbd]

does the $3000 minimum count for ETFs also? If I want to use something like zecco to invest in i Vanguard ETF, would you still need 3000?

No, you can buy as little as one share of an ETF. You would just have to pay the commission. Note that only a fraction of Vanguard funds are available as ETFs.

Also, what is the diffrence b/w Vanguard total stock market (VTSMX) and Vanguard Index 500 (VFINX)? They seem like basically the same thing.

VTSMX is about 70% large cap and 30% small/mid cap (Morningstar X-Ray), whereas VFINX is 88% large cap with just 12% mid cap (as Morningstar defines it). The mid cap definition is debatable, so many sources will say VFINX is completely large cap. So, with VTSMX you are getting a bit more diversification. The performance of the two is going to be close, but in periods where small-caps outperform, VTSMX will be superior (i.e. 2003).

[Erndiggs]

With these funds are you allowed to pull out of the funds..........where would you recommend i open a money market account??

[donnyg16]

I would probably put half of the $2,000 into a roth ira so you can start saving for retirement. The other $1,000 you should invest in stocks or ETF's

[maat55]

How do you balance a life in colledge and save money at the same time? I really want to get financially independant at a young age. I want to be successfull in life. I never want to be in debt for anything. (except necessities)

Read a few books on personal finance and investing. I recommend these:

The Total Money Makeover by Dave Ramsey
The Automatic Millionaire by David Bach

You will learn that it is not how much you make but how you use what you make. learning and desire, will get you there.