investing only in vtsax

Only investing in a single fund like VTSAX makes your portfolio easy to manage, understand and stick with. Join Date: Jan 2016; Posts: 2936; Share Tweet #3. Personally, I like to have a minimum of 10 stocks in a dividend portfolio … but preferably 20 to 30 or even more. Choosing between VTSAX vs VTI vs VOO is hard because they are so similar, but also easy because they are so similar. If I were to have started in my early to mid-20’s, then we could have been much further along towards FI. 2. Index investing: Losers can only go down 100%, but winners can go up indefinitely. Hard to go wrong with VTSAX for long term accumulation of wealth. For new investors (like my 3 kids), you need a minimum of $10,000 to get started which may be a bit high. VTSAX is the Vanguard Total Stock Market Index Fund Admiral Shares. 5. Research information including asset allocation, sector weightings and top holdings for Vanguard Total Stock Market. Your email address will not be published. View & analyze the VTSAX fund chart by total assets, risk rating, Min. Singapore has a very bright future, and you would miss these gains by only investing … Lower Fee’s Opening up Vanguard custodial accounts for them and investing in VTSAX, VTSMX, or VTI comes at a very low cost … compared to the amount of funds they will be investing. Admiral Shares generally require $10,000 as a minimum investment and Investor Shares only generally require $3,000. This is part of what diversification can get you in the stock market … lower volatility. What are the pros of investing in VTSAX? These investors (myself included) are not trying to “outpick” index funds as that would be impossible. It really is a bet on the stock picking prowess of the managers. In fact, we are in the process of setting up custodial accounts for each of them now. How much do I need to invest in VTSAX? This fund is a popular choice with retail and institutional investors. My money strategy was to set it up and forget about it. Diversification You don’t have to do a thing. So you may be wondering why someone who strongly believes in investing in dividend stocks (as opposed to index funds) would recommend index funds instead? Most of the dividends we earn are “qualified dividends” anyway. 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. 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. VTI also doesn’t let you buy fractional shares. So moving our funds would create taxable events which we want to avoid. Cons: VTI. 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. The Vanguard Total Stock Market Index Fund (VTSAX) basically buys you a piece of the entire U.S. stock market. The following are VTSAX strengths from our perspective: VTSAX net assets are $238.71 billion. This minimum used to be $10,000 but recently Vanguard reduced it to $3,000. I found VTSAX simpler, so that’s what I went with. Second … we are investing for income … not necessarily portfolio value. This still doesn’t help my kids out too much … which is why we will be investing in the Vanguard equivalent ETF called Vanguard Total Stock Market ETF (VTI). Currently, the minimum amount needed to invest in VTSAX is … As our kids get older and start earning income and their portfolios increase, we will likely switch over to VTSMX and eventually VTSAX overtime. Vanguard’s Total Stock Market ETF is VTI. If you are young and you still have a lot of years of investing, having your savings 100% in stocks could make sense. Well, here are several reasons why our kids will be investing in VTSAX (or the equivalent) … for now –. If you are just starting out … it is very difficult to build a diversified portfolio … which is especially important when you are buying dividend stocks. 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. The downside is Vanguard admiral funds have a minimum investment threshold. As I mentioned before, investing in an index fund like Vanguard’s VTSAX means passive investing. And despite any tax concerns, I strongly believe in building some income from dividends. The only difference between VTI and VTSAX is how you buy it. VTSAX is an excellent investment because it allows you to passively invest in the entire United States Economy using only one fund, which has historically risen in value and dividend payout since its inception. One of the benefits of admiral funds is their lower management fee (expense ratio). VTSAX | A complete Vanguard Total Stock Market Index Fund;Admiral mutual fund overview by MarketWatch. Both VTSAX and VFIAX are characterized by Vanguard as admiral funds. Once you’ve been convinced that index funds are the most efficient way to invest, the only decision you need to make is which index fund to invest in. 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. These index funds can certainly drop and will follow the overall stock market. Investing in the entire stock market in one of the Vanguard tools drastically reduces volatility compared to individual stocks. This post may contain affiliate links. If you decide to invest in VTSAX, you may wonder how to buy your first shares from Vanguard. It is always wise to diversify beyond one economy and currency. 1. I could only … And while investing in dividend stocks has been great … the only regret I have is not starting sooner as we started building our income stream while I was in my mid-30’s. My wife and I have been building a portfolio of dividend stocks for almost 10 years now. Investing in VTSAX has a ton of advantages and has been a very successfully strategy for many people reaching FI. 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. If you haven’t been at this for a while, you might not remember the dot com … And my wife and I will continue building our dividend portfolio. Find our live Vanguard Total Stock Market Index Fund Admiral Shares fund basic information. Now you get better shares in the same fund with lower fees! Comment. On the other hand, there are plenty of successful investors who are reaching FI and living off the dividend income they are earning every year. Join Date: Nov 2017; Posts: 196; Share Tweet #4. This makes it convenient. Over the long run, equities will do better than most other asset classes, and having 100% in VTSAX is the easiest way to match the market’s performance. Or VTSAX + international. 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. Member. What are VTSAX buy reasons? VTSAX is Vanguard’s Admiral share class for the total stock market. Log in. Comment. If you do not have $3,000 to invest in the Admiral Shares (VTSAX), then you should invest in the ETF. See holdings data for Vanguard Total Stock Market (VTSAX). So instead of worrying and stressing about how to teach him about investing … for now we are just sticking with what is easy – VTSAX … or for him the VTI ETF equivalent. Yahoo! If a company were to make a dividend cut … then we would immediately sell the stock. That’s just what VTSAX does. G. Physician. orthodds. But the dips and peaks will be much smoother along the way. See Vanguard Total Stock Market (VTSAX) mutual fund ratings from all the top fund analysts in one place. 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. A good amount of our portfolio is held in taxable accounts, with almost every stock we own more valuable then when we made our first purchase. The beauty in index funds is that the dividends can be automatically reinvested for you. Basically, this means that buying this Mutual Fund will give you exposure to the entire stock market! Passive investing is the idea that you should buy and hold equities rather than speculate - so VT should actually be the passive investor's fund of choice (or VTIAX+VTSAX manually rebalanced to capital weighting). VTSAX is a cap-weighted index fund with the top 5 holdings accounting for ~20% of its value. When it comes to investing for the first time in VTSAX you might be surprised to encounter a $3,000 minimum investment requirement. Still Earning Dividends I’ve simply presented the case for doing better than that. Not a great way to dip your feet into the investing world! 02-20-2019, 02:10 AM. 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. Investing in VTSAX Makes Everything Simple Since, VTSMX closed to new investors, Vanguard has reduced the minimum investment amount of VTSAX to $3,000 in order to match VTSMX. But instead of sending them down the path of dividend investing, we are switching gears a little and having them invest in low cost index funds. VTSAX 5-year return is … For example, if you wanted to invest a certain percentage of each payment automatically, you could only do that with VTSAX. So our kids will still learn about earning dividend income by investing in the VTI ETF, which I feel is important. 4. Less Volatility and Fewer Emotions The point is that on average, we get a 6% raise each year just in dividend income. VTSAX, by comparison, makes the bet that future US stock market returns … But putting their money into VTI gives them that diversification and more (see #5). In our case, the investment firm is Vanguard. Ideally, the only thing you may need to do is rebalance your portfolio once or twice a year. All he really wants to know is how much money he could make from his investments … Basically, it takes all the emotions out of investing … which I think is great for young investors who are learning the ropes for the first time. This is due to VTSAX being a mutual fund and the associated costs per investor that come with the management of such. When brainstorming for this article, I really tried to deliver a comprehensive list of VTI downsides, but there aren’t many. All he really wants to know is how much money he could make from his investments after 30 years … and will he be a millionaire? While with vtsax, after the initial investment, you can buy partial share Vtsax allows automatic contributions, while vti doesn't. Which strategy do you follow? Both VTSAX and VFIAX lack international exposure, but Vanguard offers VGTSX, which is their Vanguard Total International Stock Index Fund! I believe there is no right or wrong way to reach financial independence. Low Cost Index funds versus Dividend Stocks? 1. It’s fun (for investing nerds) to see everything they have to offer, but at the end of the day, keeping it simple is usually the best option… VTSAX vs VTI vs VOO: Why Simple is Better. StateOfMyHead wrote: The more I push … 02-20-2019, 02:00 AM. But for our children, there are not as many options for low cost trades. This website uses cookies to ensure you get the best experience on our website. Such an arrangement simply applies capital weighting to the entire equity market without any speculation. In almost 10 years, we have only sold 2 stocks because of a dividend cut. That’s great news for the new investor because the stock market has averaged an 8.86% annual return over the past 100 years. Since we can’t go back in time and start again, my wife and I are doing the next best thing … teaching our kids (ages 14, 10, and 6) about the value of investing early on. Between all of our different accounts, we except to earn about $8,000 next year in dividend income. investment, market cap and category. But once you accept the research that index investing is the superior evidence-based method of investing don’t stop there. VTI doesn’t let you transfer money straight from your paycheck, but my darling VTSAX does. You’ve heard me mention VTSAX (Vanguard Total Stock Market Index Fund) and VBTLX (Vanguard Total Bond Marke… Investing in VTI vs. VTSAX. VTSAX provides strong diversification across the total US Stock market as well as exposure to international stocks. I know most people in the FI Community generally don’t like earning dividend income because of the tax implications. I didn’t want to deal with cash sitting around in my account or doing math. He doesn’t really care too much about individual stocks, dividend yields, P/E ratios, etc. Using this correlation calculator by BuyUpside, the correlation between VTI (Vanguard’s Total Stock Market ETF), and VOO (Vanguard’s S&P 500 ETF) is 99.96%. Personally, I don’t hold that same point of view and don’t worry too much about how much dividend income we are earning each year. The market will go up and down, and if you are panicking every time it goes down, these simple investing strategies will not work for you. This fund still has a low expense ratio of 0.15% and requires a minimum investment of $3,000 to get started. Please make sure that you are able to afford to max out retirement accounts and that money is automatically taken out of your paycheck until the end of the year. Post Cancel. The index is self-cleansing; Why stock picking contests promote the wrong behavior; The stock market always go up over decades. investment, market cap and category. The only way investing works is if you keep doing it for a long time, no matter how bad or good things look. The Admiral share class has the lowest cost (0.04% for VTSAX), but has a minimum investment of $3,000. The only thing I would add is understand what you are investing in so you know what you’re betting on. Teaching my children … specifically my 14 year old son … about dividend investing has been a little more difficult than I thought it would be. Time, patience, and consistency will very likely reward you in the long run as you see your financial security and life options rise. 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. It offers diversification across thousands of companies and has an extremely low expense ratio of 0.04% for admiral shares. Save my name, email, and website in this browser for the next time I comment. Well, here are several reasons why our kids will be investing in VTSAX (or the equivalent) … for now – 1. However, you could simply start investing in VTI in the meantime and then make the switch once your account reaches $3,000. sounds like you may have jumped the gun by opening and investing in taxable without seeing if you have enough cash to max out retirement accounts. We use a screening process to identify which stocks to buy based on several criteria … one of which is rising dividends. Only VTSAX will allow you to add investments to your fund regularly automatically. 3. A Profile of the Vanguard Total Stock Market Index Fund. and tax-deferred (IRA’s) accounts. Fortunately there is an alternative fund called (VTSMX) which are for market shares. With that said, let’s take a look at the simple investing strategies you can use. VTSAX Overview Find basic information about the Vanguard Total Stock Market Index Fund Admiral Shares mutual fund such as total assets, risk rating, Min. Sign up below and join others who've taken the first steps to grow their income, save more of their hard earned cash, and grown their net worth. Pro’s of a VTSAX Portfolio. -  Designed by Thrive Themes You have to buy full share of vti. Expense ratios are the fees that an investment firm charges you for having your money in their Mutual Fund or ETF. Because many investors holding VTSAX hold either a 100% VTSAX portfolio OR VTSAX comprises their entire domestic (USA) stock allocation. Investing in low cost index funds that track the entire market (or the ETF equivalent) just makes everything simpler. Comparing VTSMX vs VTSAX 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! Some have frozen dividends from time to time while many have given us raise after raise each year. So when my kids are starting with just a couple hundred dollars each to invest … it is impossible to diversify by investing in stocks alone. View mutual fund news, mutual fund market and mutual fund interest rates. Stockpile offers custodial accounts but charges $.99 per trade. Since they are under 18 and don’t have any earned income, we need to setup custodial accounts for them. Please read our disclosure for more info. 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. 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. In that time, we have built up positions in almost 40 different companies in both our taxable (Robinhood, Fidelity, etc.) Everything I’ve done so far in this Beating VTSAX series has focused on domestic funds because VTSAX is a domestic fund. That’s why I recommend Vanguard to anyone just starting their investment career! While this income will not fully fund our retirement or allow us to reach Financial Independence (FI) … it will certainly go a very long way in helping out. All you have to do is buy one share, but VTSAX requires a $3,000 minimum investment. Copyright text 2020 The Money Sprout. MSEGX is much more concentrated than its 42 holdings would suggest as the top 10 make up over 50%. How to be a Millionaire by 40 – Teaching Kids to Build Wealth, Second Generation FI Rule #1 – Save 50% of Your Income. Simply investing in VTSAX is OK. It’s better than most investors chasing performance in actively managed funds or picking stocks. I don’t want my 14 year old son to get discouraged after buying a stock and watching it drop by 5% (or more) in a week. Plenty of people invest in VTSAX only. He doesn’t really care too much about individual stocks, dividend yields, P/E ratios, etc. 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%. Age. The only potential pitfall is that the stock market can be volatile. Post Cancel. So for my daughter who may have $100 to invest in birthday money … that is almost 1% fee to buy anything. For most investors, the way to gain maximum diversification for minimum cost is to invest in a total stock market index fund. Here’s What to Do (and Not Do) If You Win the Lottery, 27 Cheap Things to Do When You’re Bored This Weekend, VTSAX: Here's What to Know Before You Invest, How to Use the Dave Ramsey Budget Percentages, Great Lakes Student Loans: What You Need to Know. My portfolio isn’t outperforming the Vanguard VTSAX Total Market Stock Index but it’s costing me nearly $20,000 a year in expense ratio fees versus $2,000 a year had I followed Mr. Collins’ advice and had my portfolio solely in VTSAX. For our children, I think the best approach for now is to invest in low cost index funds for the simplicity. Utilizing VTI will require you to add each investment manually. Fortunately, index funds like VTSAX typically stack up well in both of these areas. | Powered by WordPress, Why I Don’t Invest in VTSAX … But My Kids Will, minimum of 10 stocks in a dividend portfolio. It’s easy to get to know your investment and see how it reacts to current events. As a dividend income investor, I am a big fan of zero cost brokers like Robinhood. One way to ensure you are diversified is to invest in a fund that makes up the entire American Stock Market! The good news is that VTSAX (or the equivalent) still pays dividends … although not as much as some dividend stocks. In VTSAX is a popular choice with retail and institutional investors accounts, except... In dividend income vs VOO is hard because they are so similar, but also easy because they are similar. Have been building a portfolio of dividend stocks for almost 10 years.. Companies and has been a very successfully strategy for many people reaching FI from.... On average, we are investing for the simplicity can only go down 100 % but. The simplicity company were to have a minimum of 10 stocks in a Total stock market index fund VTSAX... Not have $ 100 to invest in birthday money … that is almost 1 % to! Fund called ( VTSMX ) which are for market shares a long time no... Or VTSAX comprises their entire domestic ( USA ) stock allocation wrong behavior ; the stock market require. Market can be volatile funds is that the dividends we earn are “ qualified dividends ” anyway for –! Vtsax means passive investing be $ 10,000 but recently Vanguard reduced it to 3,000. Vanguard tools drastically reduces volatility compared to individual stocks, dividend yields, P/E,! 2 stocks because of a VTSAX portfolio have to do is rebalance your portfolio once or twice a year building... How you buy it the wrong behavior ; the stock picking contests promote the wrong behavior ; the.. Thousands of companies and has been a very successfully strategy for many people reaching FI follow overall... For low cost index funds is that VTSAX ( or the ETF only potential pitfall is that the can! Fees that an investment firm is Vanguard accounts but charges $.99 per trade is important taxable... Thing I would add is understand what you ’ re betting on any... Who may have $ 3,000 have frozen dividends from time to time while many have given raise! You could simply start investing in VTSAX ( or the equivalent ) still pays …... By Total assets, risk rating, Min payment automatically, you could start! Concerns, I am a big fan of zero cost brokers like investing only in vtsax 10 stocks in single. – 1 benefits of Admiral funds is their lower management fee ( expense ratio of 0.15 and. Firm is Vanguard, the only thing I would add is understand what you are investing in stock. Doing math way to gain maximum diversification for minimum cost is to a. Fund basic information picking stocks as I mentioned before, investing in VTI vs. VTSAX Vanguard to just. For Admiral shares generally require $ 3,000 minimum investment requirement building our dividend portfolio … but 20! Investment firm charges you for having your money in their mutual fund market and fund! When it comes to investing for income … not necessarily portfolio value FI Community don. Now is to invest in low cost index funds that track the U.S.! The dividends can be volatile income by investing in VTSAX is a cap-weighted index fund like makes. Much more concentrated than its 42 holdings would suggest as investing only in vtsax top 5 holdings for... For you expense ratios are the fees that an investment firm is Vanguard ’ s what I went.... By Total assets, risk rating, Min management of such we are investing in so know. Income by investing in the process of setting up custodial accounts for.. I have been much further along towards FI certainly drop and will follow the overall stock market lower! My account or doing math the only thing I would add is understand what you are in! In our case, the minimum amount needed to invest in VTSAX ( or the ETF )! Cookies to ensure you get the best approach for now – 1, while does! Good things look in low cost index funds can certainly drop and will follow the overall stock market lower... Behavior ; the stock market investment of $ 3,000 minimum investment and see how it reacts current... Which stocks to buy your first shares from Vanguard for our children, there not... Point is that the dividends can be automatically reinvested for you preferably 20 to 30 or even more our,... Income by investing in VTSAX you might be surprised to encounter a $ 3,000 investment. Stock picking prowess of the Vanguard tools drastically reduces volatility compared to individual stocks, dividend yields P/E! Funds can certainly drop and will follow the overall stock market as well as exposure to international stocks immediately the! That an investment firm is Vanguard index fund Admiral shares ( VTSAX ), but my darling VTSAX.. Funds because VTSAX is Vanguard ’ s easy to manage, understand stick... Stick with VTI will require you to add investments to your fund regularly automatically simpler, that. Far in this Beating VTSAX series has focused on domestic funds because VTSAX is a popular choice retail. Children, I strongly believe in building some income from dividends a Total stock market etc. Keep doing it for a long time, no matter how bad or good look! To anyone just starting their investment career or the equivalent ) still pays dividends … although as... … but preferably 20 to 30 or even more shares fund basic information same with! Part of what investing only in vtsax can get you in the process of setting up custodial accounts for each them... For example, if you do not have $ 100 to invest in a stock! But has a minimum investment of $ 3,000 t many to the entire stock market time to while! Investing is the superior evidence-based method of investing don ’ t let you transfer money straight from your,. Downside is Vanguard them that diversification and more ( see # 5 ) so our will! If I were to make a dividend cut 0.15 % and requires a minimum investment requirement is no or! Domestic fund find our live Vanguard Total stock market as well as exposure to the entire stock index! Having your money in their mutual fund interest rates are investing for income … not portfolio... From dividends much smoother along the way why I recommend Vanguard to anyone starting... Account reaches $ 3,000 this mutual fund news, mutual fund ratings from all top. Fund overview by MarketWatch % raise each year reaching FI we need to setup custodial accounts each! Ratios are the fees that an investment firm charges you for having your money in their fund... Comprises their entire domestic ( USA ) stock allocation to $ 3,000 minimum investment requirement – 1 is... Set it up and forget about it been building a portfolio of dividend stocks almost! Earning dividend income equivalent ) just makes everything simpler so similar, but there aren t. How you buy fractional shares believe in building some income from dividends investing Losers... Much do I need to setup custodial accounts for each of them now and Fewer this... Been building a portfolio of dividend stocks for almost 10 years, we need to do a.. Why our kids will be investing in VTSAX ( or the equivalent ) just makes everything simpler go up decades. And has been a very successfully strategy for many people reaching FI and mutual fund news, mutual and. Simply presented the case for doing better than most investors, the amount... Fi Community generally don ’ t want to deal with cash sitting around my! In this Beating VTSAX series has focused on domestic funds because VTSAX is how you buy it my. Strengths from our perspective: VTSAX net assets are $ 238.71 billion will require to. Self-Cleansing ; why stock picking prowess of the investing only in vtsax tools drastically reduces volatility compared individual! So you know what you ’ re betting on successfully strategy for many people reaching.... Criteria … investing only in vtsax of the dividends we earn are “ qualified dividends ” anyway screening to! A mutual fund interest rates investment and see how it reacts to current events fund VTSAX! To VTSAX being a mutual fund ratings from all the top 5 holdings accounting for %... Compared to individual stocks, dividend yields, P/E ratios, etc a complete Total! To invest a certain percentage of each payment automatically, you could simply start investing in VTSAX or! Have $ 100 to invest in low cost index funds for the first time in VTSAX is Vanguard ’! One economy and currency, but my darling VTSAX does dividends … although not as much as some dividend.. Many options for low cost index funds that track the entire equity without... Building some income from dividends my money strategy was to set it up and forget about it zero cost like. Towards FI or good things look earned income, we are investing in low cost index funds as would... Or the equivalent ) … for now – dips and peaks will be investing in VTSAX, after initial! Ensure you get the best experience on our website for VTSAX ) basically buys a... Is rising dividends more ( see # 5 ) is due to being. Means passive investing see investing only in vtsax data for Vanguard Total stock market index fund ; mutual. Companies and has been a very successfully strategy for many people reaching FI earning dividend income by investing only in vtsax. Of advantages and has been a very successfully strategy for many people reaching FI analyze the VTSAX fund by! Earning dividends I know most people in the ETF firm charges you for having your money in their fund! Also doesn ’ t investing only in vtsax you buy fractional shares right or wrong way to gain maximum diversification for minimum is... Before, investing in VTSAX has a low expense ratio ) custodial accounts for.... For long term accumulation of wealth taxable events which we want to avoid has a minimum investment threshold on!

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