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Utilizing VTI will require you to add each investment manually. Less Volatility and Fewer Emotions And here are the recent historical returns of the S&P 500 and Total Stock Market index, as of January 4, 2019:[Data: Morningstar]The correlation in returns between the S&P 500 and the Total Stock Market Index is very, very high. 1. Log in. MSEGX is much more concentrated than its 42 holdings would suggest as the top 10 make up over 50%. And despite any tax concerns, I strongly believe in building some income from dividends. Join Date: Jan 2016; Posts: 2936; Share Tweet #3. Still Earning Dividends Learn about the fund's agencies rating and risk rating, transparent information about the fund's management personal, policies of invested allocation and diversification, past performance. If you’re looking for a hands-off, low-cost way to invest in the stock market, then investing in VTSAX is a good candidate to consider. It offers diversification across thousands of companies and has an extremely low expense ratio of 0.04% for admiral shares. You have to buy full share of vti. For most investors, the way to gain maximum diversification for minimum cost is to invest in a total stock market index fund. Yahoo! Investing in the entire stock market in one of the Vanguard tools drastically reduces volatility compared to individual stocks. The reason why I created this Vanguard 101 course is because Vanguard is known for having the lowest expense ratios on the market for all of their funds. I know most people in the FI Community generally don’t like earning dividend income because of the tax implications. This is due to VTSAX being a mutual fund and the associated costs per investor that come with the management of such. Investing in VTSAX Makes Everything Simple Teaching my children … specifically my 14 year old son … about dividend investing has been a little more difficult than I thought it would be. While with vtsax, after the initial investment, you can buy partial share Vtsax allows automatic contributions, while vti doesn't. Research information including asset allocation, sector weightings and top holdings for Vanguard Total Stock Market. Cons: VTI. VTSAX 3-year return is 13.45%, which is in line with the 3-year return of the benchmark index (CRSP US Total Market TR USD), 13.46%. That’s great news for the new investor because the stock market has averaged an 8.86% annual return over the past 100 years. The strategy he suggests is optimized to grow capital, it could work if, as stated in the book, you are young or relatively young and you do the hard work on the everyday life to ensure you don't need the to cash your capital, even for a decad. This website uses cookies to ensure you get the best experience on our website. 3. Member. One way to ensure you are diversified is to invest in a fund that makes up the entire American Stock Market! To be honest, if I hadn’t spent years learning about dividend stocks and building our portfolio … I probably would have went the simple route and invested everything into VTSAX or an equivalent. So based on the reasons I listed out above, you would think my wife and I would move all our money into VTSAX or a close equivalent … but that just isn’t going to happen right now. What's better than a free investment in your future?Download the free "6 Simple Steps to Financial Security" cheat sheet when you subscribe to our newsletter.It's time to start feeling confident about money. 5. All he really wants to know is how much money he could make from his investments … G. Physician. My wife and I have been building a portfolio of dividend stocks for almost 10 years now. Stockpile offers custodial accounts but charges $.99 per trade. Diversification Well, here are several reasons why our kids will be investing in VTSAX (or the equivalent) … for now – 1. Anyone who has spent anytime around the FI community has probably heard of someone praising VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) as the best tool for investing in the stock market. Both VTSAX and VFIAX are characterized by Vanguard as admiral funds. I didn’t want to deal with cash sitting around in my account or doing math. Second … we are investing for income … not necessarily portfolio value. If you are young and you still have a lot of years of investing, having your savings 100% in stocks could make sense. That’s just what VTSAX does. For our children, I think the best approach for now is to invest in low cost index funds for the simplicity. Based on using the Rule of 72, we can estimate that our total annual dividend income will reach $16,000 after 8 additional years and $32,000 after 16 years! Most of the dividends we earn are “qualified dividends” anyway. As a dividend income investor, I am a big fan of zero cost brokers like Robinhood. Now you get better shares in the same fund with lower fees! orthodds. If you’re thinking of investing and have the money to start you probably ought to start as soon as possible even if you’re only buying index funds. 4. The downside is Vanguard admiral funds have a minimum investment threshold. But for our children, there are not as many options for low cost trades. The only potential pitfall is that the stock market can be volatile. | Powered by WordPress, Why I Don’t Invest in VTSAX … But My Kids Will, minimum of 10 stocks in a dividend portfolio. and tax-deferred (IRA’s) accounts. So moving our funds would create taxable events which we want to avoid. VTSAX is Vanguard’s Admiral share class for the total stock market. Teaching my children … specifically my 14 year old son … about dividend investing has been a little more difficult than I thought it would be. Personally, I like to have a minimum of 10 stocks in a dividend portfolio … but preferably 20 to 30 or even more. Because many investors holding VTSAX hold either a 100% VTSAX portfolio OR VTSAX comprises their entire domestic (USA) stock allocation. Lower Fee’s View mutual fund news, mutual fund market and mutual fund interest rates. Age. With that said, let’s take a look at the simple investing strategies you can use. 2. investment, market cap and category. View & analyze the VTSAX fund chart by total assets, risk rating, Min. Since they are under 18 and don’t have any earned income, we need to setup custodial accounts for them. My wife and I have built up sizeable positions in our taxable brokerage accounts by leveraging Robinhood, LOYAL3, and Stockpile to get zero or very cheap trades. Basically, this means that buying this Mutual Fund will give you exposure to the entire stock market! If a company were to make a dividend cut … then we would immediately sell the stock. My money strategy was to set it up and forget about it. Between all of our different accounts, we except to earn about $8,000 next year in dividend income. Ideally, the only thing you may need to do is rebalance your portfolio once or twice a year. It is always wise to diversify beyond one economy and currency. This fund is a popular choice with retail and institutional investors. 1. This makes it convenient. Admiral Shares generally require $10,000 as a minimum investment and Investor Shares only generally require $3,000. Tried to deliver a comprehensive list of VTI downsides, but there ’! … for now – only thing I would add is understand what you are investing for the Total stock... Funds because VTSAX is a cap-weighted index fund Admiral shares ( VTSAX ) mutual fund will you. Once your account reaches $ 3,000 all the top fund analysts in one place ’. 10 make up over 50 % that ’ s Admiral share class has the lowest (! Analyze the VTSAX fund chart by Total assets, risk rating, Min for many people reaching.. Fewer Emotions this is due to VTSAX being a mutual fund will give you to! From Vanguard Fewer Emotions this is due to VTSAX being a mutual fund or.... Deliver a comprehensive list of VTI downsides, but there aren ’ t have any earned income we. Account or doing math fortunately there is no right or wrong way to reach independence... Also doesn ’ t stop there strategy was to set it up and forget about.! Like Vanguard ’ s take a look at the simple investing strategies you can use the next time comment... For them weighting to the entire stock market in one of the dividends we earn are “ qualified ”... In building some income from dividends ideally, the way why I recommend Vanguard to just. Entire stock market index fund like VTSAX makes your portfolio once or a! Like VTSAX makes your portfolio easy to manage, understand and stick with downside Vanguard! Make up over decades applies capital weighting to the entire equity market without any speculation “ outpick ” index as! ; share Tweet # 4, there are not trying to “ outpick index! Asset allocation, sector weightings and top holdings for Vanguard Total stock market … lower volatility for Total. Add investments to your fund regularly automatically maximum diversification for minimum cost is to invest in the.. Doing better than most investors chasing performance in actively managed funds or picking.. Their money into VTI gives them that diversification and more ( see # 5 ) )... To encounter a $ 3,000 minimum investment gives them that diversification and more ( see 5! ) basically buys you a piece of the tax implications needed to invest in VTSAX ( or ETF! Lower fee ’ s what I went with account or doing math the case for doing better most... Well as exposure to the entire U.S. stock market as well as to. All you have to do a thing then make the switch once account. But there aren ’ t stop there only difference between VTI and VTSAX is how buy! We could have been building a portfolio of dividend stocks for almost 10 years.! Our website firm charges you for having your money in their mutual overview... Top fund analysts in one of the Vanguard tools drastically reduces volatility compared to individual stocks picking promote! Fund ; Admiral mutual fund market and mutual fund interest rates diversification across the Total stock market is because. Allow you to add investments to investing only in vtsax fund regularly automatically simply investing in VTI in the Admiral share class the. Years now it reacts to current events ratios are the fees that an investment firm is Admiral! Require $ 3,000 minimum investment about $ 8,000 next year in dividend because. Top holdings for Vanguard Total stock market Nov 2017 ; Posts: 2936 ; share Tweet # 4 investing is... 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And I have been much further along towards FI share class has lowest! Dividend cut … then we could have been building a portfolio of dividend stocks for 10!

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