Investing can be real simple or very complicated. Most banks and investments companies don’t want to make investing simple because if it was, what do you need them for? In this article I will talk about how I started my investing journey. I started investing through Vanguard on 1 April 2014 with only $1000.
Vanguard seemed like a very solid company based on the research I had done so I chose them. I really like companies that looks out for their cistomers and not all about profits. With only $1000 to start, I was very limited to what investments I can plunk my money on. So here’s what I did.
Vanguard Star Fund (VGTSX): I invested $1000 bucks to this fund until I could build up and invest to a better one. It’s a very balanced fund with 60% stocks and 40% bonds. The risk of losing all my money was pretty low and it was a good way to dip my toes in the pool. Fees are moderately low at 0.36% and I get my investments in domestic stocks, international stocks, and US bonds. Not a bad deal. I helped my mom and sister start their investments with this exact fund.
Vanguard 500 Index Fund (VFINX): When I built up my investments to $3000, I sold my STAR fund and bought this standard bearer. The minimum for this fund is $3000. The fund invests in 500 of the largest U.S. companies including Apple and Exxon. Fees are even lower at 0.16% and even if one company goes ENRON style, I still don’t lose my whole nest egg. Currently it has an interest return rate of 3.86 %. Since inception, it has an interest rate average of 10.86%.
Vanguard Health Care Fund (VGHCX): I currently invest in this fund as more of a wild card and I really like how it has been performing lately. This fund primarily focuses on the health care industry, such as pharmaceutical firms, medical supply companies, and research firms. The fees are similar to STAR fund at 0.36% and minimum to invest is $3000. My personal returns so far is 6.2%
Vanguard Total Market Index Fund (VTSAX): Very similar to Vanguard 500 index except the fees are much lower at 0.05%. This fund provides investors with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. If I had $10,000 (which is the minimum) I would get this fund right away! My personal return so far is at 8.5%.
So that’s my journey with investing so far. Ok so it was a bit more complicated but let me break it down this way to make it much easier. If I could do it again, I would save $3000 and invest in Vanguard 500 Index Fund. Once I reach the $10,000 mark, I would exchange it to the Vanguard Total Market Index Fund and call it a day.
You can diversify a little bit here and there like I did if you want, but it’s hard to lose when you own so much of everything. What matters is just getting that investment train rolling. I started investing two and half years ago with only $1000 and now have almost $40,000! We’re talking about a very modest NCO pay here. With a little bit of determination and discipline, anyone can invest and build a huge nest egg.
” The best time to plant a tree was 20 years ago. The second best time to plant a tree is today.”
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