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Old 01-29-2015, 10:00 AM
 
Location: Elko, NV
474 posts, read 771,982 times
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So I finally got finances under control and am able to start saving up, I opened a high-yield savings account for my emergency fund and am also opening Roth IRAs for my husband and myself. Right now my budget looks like we will be able to set aside about $1,000 - $1,500 per month, and I was planning on splitting it $250 in my IRA, $250 in my husband's, and the remaining into our emergency fund until we get a solid 3 months expenses.

If I put in only $250 per month, what would be the best method of investing? We are 26, so looking for moderate to aggressive growth. I was thinking commission-free ETFs, since the lack of commission means less money taken out if we do several small purchases. Are ETFs a good idea, or is there a better option for investing small amounts each month? I also have a stand alone brokerage account, but I usually save until I have enough funds to buy 30+ shares of stock, usually close to $1000 for the companies I currently hold positions in, but for the IRA I'd prefer to do smaller but regular deposits and invest them immediately rather than holding in a cash sweep vehicle for a few months.
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Old 01-29-2015, 01:58 PM
 
26,158 posts, read 28,555,015 times
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Most mutual funds normally accept $100 as their minimum increase, although most funds do require a minimum of $1000 for IRAs.

There are a few good mutual funds that have low minimum requirements.

FPA Crescent (mix of stocks & bonds). $100 minimum for IRA.

Amana Growth or Amana Income. $100 minimum for IRA.

If you wait until you have $1000 for your IRA, options open up.

Dodge & Cox's funds are excellent and have $1000 minimums for their IRAs. I particularly like Dodge & Cox Balanced. It has a nice low expense ratio of .53%.
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Old 01-29-2015, 04:18 PM
 
8,870 posts, read 5,152,159 times
Reputation: 10160
Quote:
Originally Posted by awestover89 View Post
So I finally got finances under control and am able to start saving up, I opened a high-yield savings account for my emergency fund and am also opening Roth IRAs for my husband and myself. Right now my budget looks like we will be able to set aside about $1,000 - $1,500 per month, and I was planning on splitting it $250 in my IRA, $250 in my husband's, and the remaining into our emergency fund until we get a solid 3 months expenses.

If I put in only $250 per month, what would be the best method of investing? We are 26, so looking for moderate to aggressive growth. I was thinking commission-free ETFs, since the lack of commission means less money taken out if we do several small purchases. Are ETFs a good idea, or is there a better option for investing small amounts each month? I also have a stand alone brokerage account, but I usually save until I have enough funds to buy 30+ shares of stock, usually close to $1000 for the companies I currently hold positions in, but for the IRA I'd prefer to do smaller but regular deposits and invest them immediately rather than holding in a cash sweep vehicle for a few months.
ETFs with no commission are fine, but you will have to set your own asset allocation and add new money accordingly.

A good, broadly diversified, all-in-one mutual fund is simpler, but you may pay slightly more in expense ratios.

But the real kicker with ETFs is that unless you are an index investor, you may not be able to buy the fund(s) you prefer as an ETF.
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