start up mutual fund account?

Question

what mutual fund company has the lowest start up balance i do not have 2-3k to put in to an account i am only 24 but would like to start something can i do something with a few hundred and just add like 50 a month for the next 45yrs???

Answer 1

First, mutual funds are generally bad because of high fees. I assume you have no retirement accounts presently. You should open up a ROTH IRA. The money grows TAX FREE. Otherwise, you'll have to pay taxes on any money made. If you already have one, then open up a Standard IRA. It grows tax defered; you'll pay it later (and at a lower rate). Most places will allow to open an account w/ only 1K for both types of IRA's. Otherwise, you'll need 3K. Let's forget about mutual funds. You can open an IRA w/ a discount broker like TD Ameritrade. No min is required. Second, you buy ETF's instead. You can buy them in small quants but they behave like mutual funds in that they spread your risk. Look at some ETF's from Vangurd

https://flagship.vanguard.com/VGApp/hnw/FundsVIPERByType

You can buy one share of Total Stock Market ETF (VTI) for $144. This one tries to replicate the stock market. It behaves just like mutual fund. Note: You don't need to go through Vanguard to buy their ETF's. You buy anyone's ETF's from the broker. You pay $10 for the transaction. You can buy 1,000 shares of an ETF and the cost will still be $10. It's not based on the number of shares (unless you buy like a million share). I would explain how mutual funds suck if I had the time (tax, fees, lack of freedom when trading). You can buy and sell ETF's whenever you like.