a new start

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duplin county
Posts: 33
Joined: Sat Jan 18, 2014 10:40 am

a new start

Post by duplin county »

Would you recommend a young investor with less than $1000 to invest in Schwab Index funds?
beammeupscotty
Posts: 187
Joined: Thu Jan 21, 2010 7:13 am

Re: a new start

Post by beammeupscotty »

Yes. I'm all Vanguard myself, but I opened Schwab accounts for my kids since they don't have $1,000 to start with. For a custodial account, $100 minimum investment and free trading with low-cost Schwab index ETFs (SCHB Schwab U.S. Broad Market = .04% ER).
Last edited by beammeupscotty on Wed Jan 22, 2014 9:17 pm, edited 3 times in total.
John3754
Posts: 1289
Joined: Tue Mar 19, 2013 8:56 pm

Re: a new start

Post by John3754 »

I'm not familiar with Schwab so I can't comment on them, but another option would be to save until you have $1,000 and then use one of the Vanguard Target date funds, which have a $1,000 minimum.
lloydbraun
Posts: 101
Joined: Mon May 30, 2011 9:14 pm

Re: a new start

Post by lloydbraun »

I personally use Schwab etf funds because I can only afford to contribute around $75 per month to my Roth. My 403B gives me access to basic Vanguard funds (Int'l Index, Total US, and Total Bond Index) but the Schwab ETFs allow me to get a little more exposure to Emerging Markets and to invest in the REIT index. Personally I would prefer to invest in Vanguard index funds, not etfs, but I won't have the minimums for a while so at least the Schwab etfs allow me to diversify a bit. Just remember that if you're purchasing etfs that you're buying by the unit so if you have $75 to invest and a unit is $30, you can only buy two and will then have $15 left in your account. The expense ratios on the schwab etfs are much better than their index fund expense ratios, unless you're just trying to invest in the S&P 500 or Total U.S. Stock Market as the expense ratios for these index funds are low (.09 I think).
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rob
Posts: 5247
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: a new start

Post by rob »

No... I would say wait until you have 3K and just start where you want to end up..... I'm not saying Schwab is bad - I had them as a 401K provider for years as was quite happy with them. It's just not worth the hassle of moving later with such a small amount IMO.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
Laura
Posts: 7975
Joined: Mon Feb 19, 2007 6:40 pm

Re: a new start

Post by Laura »

How young and is the $1000 from earned income? If yes, you should immediately open up a roth IRA at Vanguard and invest in a Vanguard Target Retirement fund.

That assumes that the new investor already has an emergency fund established. If not, then funding the emergency fund should take priority over investing the money.

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.
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