Hacker News Reader

Hacker News

Comment by jerhinesmith | Hacker News Reader

Parent Full thread

jerhinesmith

For the person who wants to put time/effort into investing, where you suggest they start?

View on HN

Open a taxable account at Vanguard and invest however much you want in VTSMX. Done.

For extra credit, switch to VTSAX once you get above $50K.

What are the pros/cons of the various Vanguard options?

I'm in VTI (TOTAL STOCK MARKET ETF) and VXUS (TOTAL INTL STOCK INDEX FUND ETF) because I believe that's what it's suggestion thing said to me, what's the comparison to VTSMX? And what's the difference for VTSAX at 50K?

VTSMX is the same as VTI, just VTI is an ETF and VTSMX is a mutual fund. For most normal cases, it doesn't matter which you have.

Having some international exposure is fine too and diversifies a little, but historically, as long as you don't sell off during a lull in the market, the US total stock market has performed admirably as long as you can hold your shares at least a few years.

VTSAX is the "Admiral" version of VTSMX. Same index, but cheaper to own (they take a smaller amount out of it every year for management fees.)

I think the best investment media today is TastyTrade.com. Imagine if CNBC were actually helpful, and if the hosts were real traders who let you in on what they're doing in real time.

They trade options and futures a lot which aren't right for a brand new investor, but it's great content regardless. They talk about pork bellies on Bloomberg and I'm never going to invest in them. They've got a research team, emulating the hedge fund model, and they turn out a research piece literally every day. Check out the podcast.

These guys built ThinkOrSwim, had a $600MM exit, and now they're just giving everything away. They've also built a great (free) options trading platform, Dough.com. Notable if only to show you how these guys run their business.

Also, useful to read Random Walk down Wall Street and understand the efficient market hypothesis.

I wrote this primer on "Public and Private Market Investing" which I think is a good place to start: http://sapan.svbtle.com/musings-on-markets :)

With your companies 401k or equivalent. Just put whatever percentage you want into a low cost, broad index fund. The most important part is to make this allocation before your paycheck gets cut (i.e. you never see the money).

What about someone like me with no 401k?

IRA or equivalent. If you have no option for a tax advantaged account, the advice to pick a broad unmanaged index fund or etf still holds.

> you never see the money

Also important to add, if you invest with 401k/IRA money, if you don't want to pay a lot of taxes or early withdrawal fees, you won't "see" the money until you retire.

Also make sure to change jobs every few years so you can move money from the 401k to an IRA without a tax hit. 401k's tend to suck - high fees, low returns, little competition. Most of the funds in your 401k are there because a fund salesman took an HR person out to a steak dinner.

When you change jobs, always move the 401k into an IRA and put the money into low cost ETFs.

Unless you have enough income to be over the Roth IRA contribution limits and want to make yearly backdoor Roth IRA contributions (non-deductible traditional contribution followed by a rollover to a Roth IRA). If you have a traditional IRA there can be some tax complications due to the pro-rata rule. If any traditional contributions are instead in a 401k the conversion is a lot simpler, and tax-free.

The other way around it is to open an individual 401k if you have any self-employment income, but that involves a bit more paperwork than an IRA.

The sidebar on /r/personalfinance.

The book "A Random Walk Down Wall Street" by Burton Malkiel is an excellent place to start.

Reply on news.ycombinator.com