Wednesday, December 20, 2006

The Second Financial New Year's Resolution

The first, which came somewhat early, was to begin giving to good causes regularly, starting with 5% of my net pay.

The second, also somewhat early, is to open a Roth.

I'd like to open my Roth at Vanguard, which means a minimum deposit of $3,000. My ING account currently has a balance of $2,313.57. By the beginning of the New Year, the balance will be around $2,420. Still a ways off. Nevertheless, I feel really strongly about opening my account with Vanguard, because of their low fees and strong target funds. My (not-so-)secret hope is that my generous aunt will continue her tradition of generous cash gifts to the nieces and nephews, and with my January savings contributions, I'll reach the $3,000 threshold by the end of January.

Then I'll open the Vanguard account, plunk my cash in a target fund, set up automatic transfers, and forget about it for awhile.


mobiousz said...

Good choice with Vanguard. :D

I recently opened a Roth IRA with Vanguard earlier this year (late July). With automatic transactions going in a Target Life Fund (great returns!) things couldn't be simpler.

I'm looking foward to see what kind of returns my particular fund will get on a full year. It's rather young still...

Overall, I'm happy with my choice and I go recommending Vanguard to anyone interested.

Just wanted to share. :)

(Btw, great blog--one of my favs.)

Anonymous said...


Why have you chosen Vanguard? I'm rolling over my 403b into an IRA and I'm looking at Vanguard and T. Rowe Price. Any thoughts on either company?



Anonymous said...

English Major: I have my roth w/ Vanguard and loves it so far. One thought - maybe you can put in $4k for 2006 contribution, and then immediately another $10k for 2007, so you don't get hit by the $10 fee. (not sure if you can put in $5k at a time for ira though, might want to check that).

Trixie: T. Rowe Price has more actively managed funds and is bit more "agressive", i.e. more foreign & stocks. Vanguard's mainly index funds, so the expense ratio is very low (0.2% for target retirement funds).

English Major said...

Mobiousz--thanks for the confirmation, and for the compliment!

TrixieBelden--first of all...Trixie Belden! I used to read my mom's copies of the Trixie Belden books when I was a kid. I loved those books. Second, this article does a better job than I could do of summing up why I'm going with Vanguard. Low fees, no fuss.

Wanda--I'm glad you're liking Vanguard. One thing: I thought the max contribution for 2007 was $4,000--where are you getting the $10k figure? Frankly, it's academic, because, alas, I don't have an extra $10k lying around, or even an extra $4k, but nevertheless. The fee is low enough that the idea of paying it once (or even twice) doesn't bother me; though I did consider starting with T. Rowe Price and then moving the account over when it reached Vanguard's no-fee threshold, I decided against it. Too much hassle.

Anonymous said...

English Major - Oops! I meant an extra $1k. No wonder it didn't make sense! ;)