Starting a Three-Fund Portfolio - which funds?

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bossballer41
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Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Sat Jun 10, 2017 5:03 pm

[Moved into a stand-alone post from The Three-Fund Portfolio -- admin LadyGeek]

Probably a dumb question, but I just started my Vanguard retirement account (SEP-IRA) and put $2000 in. When I go to buy shares on the Vanguard site it looks like the minimum is $10,000 (admiral) for the three-fund portfolio, is there different funds I should be looking for as a starter?
Last edited by bossballer41 on Sun Jun 11, 2017 3:17 pm, edited 1 time in total.

gvsucavie03
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Re: Starting a Three-Fund Portfolio - which funds?

Post by gvsucavie03 » Sat Jun 10, 2017 6:21 pm

Target Retirement until you have the minimums saved up to split into the TFP.

TropikThunder
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Re: Starting a Three-Fund Portfolio - which funds?

Post by TropikThunder » Sat Jun 10, 2017 6:47 pm

gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher ER]

And before someone brings up ETF's, I would suggest just sticking with a TR fund for now. Yes, you can buy ETF's for lower initial outlay but with a small portfolio, none of the advantages of ETF's really come into play so it's an unnecessary complication. Just pick the TR fund with the desired stock/bond ratio and keep on grindin'. :wink:

gvsucavie03
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Re: Starting a Three-Fund Portfolio - which funds?

Post by gvsucavie03 » Sat Jun 10, 2017 8:24 pm

TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher ER]

And before someone brings up ETF's, I would suggest just sticking with a TR fund for now. Yes, you can buy ETF's for lower initial outlay but with a small portfolio, none of the advantages of ETF's really come into play so it's an unnecessary complication. Just pick the TR fund with the desired stock/bond ratio and keep on grindin'. :wink:
Need $3k for Vanguard brokerage account, too

radiowave
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Re: Starting a Three-Fund Portfolio - which funds?

Post by radiowave » Sat Jun 10, 2017 11:04 pm

bossballer41 wrote:
Probably a dumb question, but I just started my retirement account and put $2000 in. When I go to buy shares on the Vanguard site it looks like the minimum is $10,000 (admiral) for the three-fund portfolio, is there different funds I should be looking for as a starter?
Many retirement accounts that have monthly contributions will waive the minimum amount. If you have access to Vanguard Admiral funds in your retirement account, check if you can start purchasing them now.

MotoTrojan
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Re: Starting a Three-Fund Portfolio - which funds?

Post by MotoTrojan » Sun Jun 11, 2017 2:18 am

gvsucavie03 wrote:
Need $3k for Vanguard brokerage account, too
False.

gvsucavie03
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Re: Starting a Three-Fund Portfolio - which funds?

Post by gvsucavie03 » Sun Jun 11, 2017 6:52 am

MotoTrojan wrote:
gvsucavie03 wrote:
Need $3k for Vanguard brokerage account, too
False.
Used to be. Do you know when they changed their rule? I use a TR fund right now, so I never had to bother with it.

mongstradamus
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Re: Starting a Three-Fund Portfolio - which funds?

Post by mongstradamus » Sun Jun 11, 2017 8:01 am

If you are starting off with 2,000 in an IRA Account for example I would think about starting off with a TR fund then once you get enough to buy the separate parts of the 3 fund portfolio. Thats what I would do at least. Alternatively you could just buy etf versions of the three fund portfolio to start off.

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ruralavalon
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Re: Starting a Three-Fund Portfolio - which funds?

Post by ruralavalon » Sun Jun 11, 2017 10:06 am

Welcome to the forum :) .
bossballer41 wrote:[Moved into a stand-alone post from The Three-Fund Portfolio -- admin LadyGeek]

Probably a dumb question, but I just started my retirement account and put $2000 in. When I go to buy shares on the Vanguard site it looks like the minimum is $10,000 (admiral) for the three-fund portfolio, is there different funds I should be looking for as a starter?
Is this an IRA at Vanguard? If so just pick a target retirement fund suitable to your age, and contribute as much as you can each year up to the maximum permitted.

Is there a plan offered at your work, like a 401k, 403b, 457 or TSP? Is there an employer match offered? Are you also making use of that plan?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MotoTrojan
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Re: Starting a Three-Fund Portfolio - which funds?

Post by MotoTrojan » Sun Jun 11, 2017 10:34 am

gvsucavie03 wrote:
MotoTrojan wrote:
gvsucavie03 wrote:
Need $3k for Vanguard brokerage account, too
False.
Used to be. Do you know when they changed their rule? I use a TR fund right now, so I never had to bother with it.
Not sure. Maybe when they activated the new system that forced mutual fund owners into brokerage accounts. I opened mine in February of this year.

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Sun Jun 11, 2017 3:16 pm

Hey guys,

Overwhelming support already haha, thanks much for all the replies. I will start with the target retirement and try and build it up to $10k as quickly as possible.
ruralavalon wrote:Welcome to the forum :) .
Is this an IRA at Vanguard? If so just pick a target retirement fund suitable to your age, and contribute as much as you can each year up to the maximum permitted.

Is there a plan offered at your work, like a 401k, 403b, 457 or TSP? Is there an employer match offered? Are you also making use of that plan?
This is a SEP-IRA through Vanguard, as I'm self-employed and recently started an LLC. I'm 26 and have a Roth IRA with $7k through Edward Jones, I'm thinking of moving that to Vanguard as well. Trying to save $1k a month between both IRAs.

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ruralavalon
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Re: Starting a Three-Fund Portfolio - which funds?

Post by ruralavalon » Sun Jun 11, 2017 5:32 pm

bossballer41 wrote:Hey guys,

Overwhelming support already haha, thanks much for all the replies. I will start with the target retirement and try and build it up to $10k as quickly as possible.
ruralavalon wrote:Welcome to the forum :) .
Is this an IRA at Vanguard? If so just pick a target retirement fund suitable to your age, and contribute as much as you can each year up to the maximum permitted.

Is there a plan offered at your work, like a 401k, 403b, 457 or TSP? Is there an employer match offered? Are you also making use of that plan?
This is a SEP-IRA through Vanguard, as I'm self-employed and recently started an LLC. I'm 26 and have a Roth IRA with $7k through Edward Jones, I'm thinking of moving that to Vanguard as well. Trying to save $1k a month between both IRAs.
Glad to see that you intend contributing $12k per year.

What funds are you using in your Roth IRA at Edward Jones? What fees and expenses are you paying there?

I hope that you will seriously consider putting all ongoing contributions into your SEP IRA.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Sun Jun 11, 2017 6:49 pm

ruralavalon wrote: Glad to see that you intend contributing $12k per year.

What funds are you using in your Roth IRA at Edward Jones? What fees and expenses are you paying there?

I hope that you will seriously consider putting all ongoing contributions into your SEP IRA.
I just initiated a transfer of my Roth IRA from Edward Jones to Vanguard after doing some research on the fees between the two. Wish I would have known that before I enlisted the help of an advisor at EJ when I first started my Roth. Going forward, all contributions will be going into my SEP-IRA.

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Taylor Larimore
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Transferring from Edward Jones to Vanguard

Post by Taylor Larimore » Mon Jun 12, 2017 9:49 am

I just initiated a transfer of my Roth IRA from Edward Jones to Vanguard.
bossballer41:

I would be interested in learning how the transfer goes. Come back to this thread to share your experience.

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

jbow44
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Re: Starting a Three-Fund Portfolio - which funds?

Post by jbow44 » Mon Jun 12, 2017 11:51 am

I recently had to make similar decision while opening a backdoor Roth at Vanguard.

As others have correctly pointed out the target retirement fund of your choice is the simplest choice and will work just fine, especially if you like to be completely hands off.

I chose the ETF version and came up with:

VTI & VBR for domestic stocks, VXUS for international stocks & VCIT for bonds (BND if you want the total bond index).

gvsucavie03
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Re: Starting a Three-Fund Portfolio - which funds?

Post by gvsucavie03 » Mon Jun 12, 2017 3:30 pm

jbow44 wrote:I recently had to make similar decision while opening a backdoor Roth at Vanguard.

As others have correctly pointed out the target retirement fund of your choice is the simplest choice and will work just fine, especially if you like to be completely hands off.

I chose the ETF version and came up with:

VTI & VBR for domestic stocks, VXUS for international stocks & VCIT for bonds (BND if you want the total bond index).
I see that small cap tilt getting thrown into a TFP post :wink:

bossballer41
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Re: Transferring from Edward Jones to Vanguard

Post by bossballer41 » Mon Jun 12, 2017 4:20 pm

jbow44 wrote:I recently had to make similar decision while opening a backdoor Roth at Vanguard.

As others have correctly pointed out the target retirement fund of your choice is the simplest choice and will work just fine, especially if you like to be completely hands off.

I chose the ETF version and came up with:

VTI & VBR for domestic stocks, VXUS for international stocks & VCIT for bonds (BND if you want the total bond index).
Awesome, thank you! I'm pretty hands-off which is how I found this forum actually haha (searching for 'simple portfolios').
Taylor Larimore wrote:
I just initiated a transfer of my Roth IRA from Edward Jones to Vanguard.
bossballer41:

I would be interested in learning how the transfer goes. Come back to this thread to share your experience.

Thank you and best wishes.
Taylor
I certainly will Taylor, stay tuned :happy

nura
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Re: Starting a Three-Fund Portfolio - which funds?

Post by nura » Mon Jun 12, 2017 4:33 pm

TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher
You can buy target retirement income fund (VTINX) for just $1000 with a ER of 0.13, upgrade to life statergy funds once you hit $3000, balanced index (VIBAIX) when you hit $10,000.

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Taylor Larimore
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Staying turned

Post by Taylor Larimore » Mon Jun 12, 2017 6:37 pm

Taylor, stay tuned :happy
bossballer:

I will.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Wed Jun 14, 2017 5:01 pm

Taylor Larimore wrote:
Taylor, stay tuned :happy
bossballer:

I will.

Best wishes.
Taylor
Update: I just spoke with the financial advisor from EJ that's been helping me and she told me only about half of the $7500 in my Roth IRA can be transferred in kind to Vanguard; if I want to transfer all of it, she will need to liquidate it and transfer it over, which will cause me lose about $450 (due to some credit/fee that I had apparently been given earlier from EJ by buying into the funds my Roth is currently in).

So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?

nura wrote:
TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher
You can buy target retirement income fund (VTINX) for just $1000 with a ER of 0.13, upgrade to life statergy funds once you hit $3000, balanced index (VIBAIX) when you hit $10,000.


Perfect, thank you Nura.

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Taylor Larimore
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Re: Starting a Three-Fund Portfolio - which funds?

Post by Taylor Larimore » Wed Jun 14, 2017 6:13 pm

So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?
bossballer41:

You will need to save hundred's of thousands of dollars for a comfortable retirement. Paying $450 to leave Edward Jones could be the best $450 you will ever spend.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Wed Jun 14, 2017 6:43 pm

Taylor Larimore wrote:
So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?
bossballer41:

You will need to save hundred's of thousands of dollars for a comfortable retirement. Paying $450 to leave Edward Jones could be the best $450 you will ever spend.

Best wishes.
Taylor
Very true, Taylor. Gotta keep the big picture in mind. I'll go ahead with it and let you know how the rest of the process goes.

bob_m10
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bob_m10 » Thu Jun 15, 2017 5:53 am

nura wrote:
TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher
You can buy target retirement income fund (VTINX) for just $1000 with a ER of 0.13, upgrade to life statergy funds once you hit $3000, balanced index (VIBAIX) when you hit $10,000.
Why is life strategy and upgrade over target retirement? Thanks Bob

gvsucavie03
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Re: Starting a Three-Fund Portfolio - which funds?

Post by gvsucavie03 » Thu Jun 15, 2017 6:08 am

bob_m10 wrote:
nura wrote:
TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher
You can buy target retirement income fund (VTINX) for just $1000 with a ER of 0.13, upgrade to life statergy funds once you hit $3000, balanced index (VIBAIX) when you hit $10,000.
Why is life strategy and upgrade over target retirement? Thanks Bob
I don't think it is a necessary step if your goal is to end up with a TFP. If you are saving one IRA per year, it'll take a little over 2 years unless the market tanks.

nura
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Re: Starting a Three-Fund Portfolio - which funds?

Post by nura » Mon Jun 19, 2017 7:11 am

bob_m10 wrote:
nura wrote:
TropikThunder wrote:
gvsucavie03 wrote:Target Retirement until you have the minimums saved up to split into the TFP.
+1.
Really, this is the only thing you can do with $2,000 since all other Vanguard funds have at least a $3,000 minimum. [well, the STAR fund has a $1,000 minimum as well but it's actively managed and has a higher
You can buy target retirement income fund (VTINX) for just $1000 with a ER of 0.13, upgrade to life statergy funds once you hit $3000, balanced index (VIBAIX) when you hit $10,000.
Why is life strategy and upgrade over target retirement? Thanks Bob
LS has minimum of $3000, investor can start with $1000 on VTINX (30/70) or STAR (60/40) before qualifying for Life Strategy minimums.

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Fri Jun 23, 2017 4:55 pm

Taylor Larimore wrote:
So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?
bossballer41:

You will need to save hundred's of thousands of dollars for a comfortable retirement. Paying $450 to leave Edward Jones could be the best $450 you will ever spend.

Best wishes.
Taylor
Update for you Taylor, all my assets were transferred over to Vanguard from Edward Jones with minimal loss from a few that needed to be liquidated and transferred as cash, along with the aforementioned fees (which only came out to be about $150). All in all, I'm quite happy with the conversion :)

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Taylor Larimore
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Re: Starting a Three-Fund Portfolio - which funds?

Post by Taylor Larimore » Fri Jun 23, 2017 6:46 pm

bossballer41 wrote:
Taylor Larimore wrote:
So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?
bossballer41:

You will need to save hundred's of thousands of dollars for a comfortable retirement. Paying $450 to leave Edward Jones could be the best $450 you will ever spend.

Best wishes.
Taylor
Update for you Taylor, all my assets were transferred over to Vanguard from Edward Jones with minimal loss from a few that needed to be liquidated and transferred as cash, along with the aforementioned fees (which only came out to be about $150). All in all, I'm quite happy with the conversion :)
bossballer41:

You made my day!

Congratulations and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

bossballer41
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Re: Starting a Three-Fund Portfolio - which funds?

Post by bossballer41 » Fri Jun 23, 2017 8:47 pm

Taylor Larimore wrote:
bossballer41 wrote:
Taylor Larimore wrote:
So I guess the question is, is this still a worthwhile move to Vanguard knowing I will lose that $450?
bossballer41:

You will need to save hundred's of thousands of dollars for a comfortable retirement. Paying $450 to leave Edward Jones could be the best $450 you will ever spend.

Best wishes.
Taylor
Update for you Taylor, all my assets were transferred over to Vanguard from Edward Jones with minimal loss from a few that needed to be liquidated and transferred as cash, along with the aforementioned fees (which only came out to be about $150). All in all, I'm quite happy with the conversion :)
bossballer41:

You made my day!

Congratulations and best wishes.
Taylor
Haha glad to help! :sharebeer

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