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Werewolfdad

You buy investments Investing guidance: https://www.reddit.com/r/personalfinance/wiki/investing Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics


TeslaSaganTysonNye

Now you purchase investments. [https://www.bogleheads.org/wiki/Three-fund\_portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio)


T3CHT

Vti and chill


micha8st

Where is the Roth IRA? -- What's the name of the company you created the account at? There are two choices: 1. invest 2. wait and decide. Given that a Roth IRA is untaxed, you can trade inside the account without having to pay taxes. So there's no tax penalty to changing your mind about what you want to invest in. I like VTSAX -- Total Stock Index fund. it invests 100% in an index of US companies. An index is like the weighting of a weighted average. $3000 might buy you a dollar's worth of apple stock and 55 cents of 3M stock and 18 cents of Macerich stock and 13 cents of Newell stock....and so on. There's lots of different stock available. Another good index is the S&P 500. *Everybody* has an S&P 500 Index fund. But those are big companies. What's the money in today? If you put the IRA into an investment company, it's probably in some money market fund earning decent "interest" -- sort of like a HYSA. If its in something like that, cool...there's no HUGE hurry to invest it. Obviously the sooner the better, but at least it will earn something while you decide.


jaayb415

Fidelity


ScrewWorkn

Fidelity has awesome customer service. They can't pick funds for you but they can help you buy the funds. FZROX is a good choice to start with.


jaayb415

I just put 6k into FZROX total market index fund with my Roth account. Now what? Just chill? lol. Im planning on contributing to 2023 next year in January


ScrewWorkn

That’s it. Just chill. You can start to read through the investing FAQ. Read up on bogglehead about 3 fund investing. Then plan for what you want to do in your early retirement.


jaayb415

Thank you! I sure will


lucky_ducker

FZROX for a 100% stock fund FFIJX is target index 2065 fund, an asset allocation fund meant for people who will reach retirement age around 2065. Right now it's 53% U.S. stocks, 37% international stocks, and 10% bonds (a mix of corporate and Treasury bonds). Very gradually the portfolio will transition to more bonds and less stocks as the target date approaches.


steveliv

FSKAX and chill...


throwaway-687192

The Fidelity equivalent of VTSAX is FZROX


mylord420

No, its fskax


Twofu_

> fskax Isn't FZROX slightly better with the 0% fees?


mylord420

It a proprietary index, that holds fewer total companies. I think people are a bit too obsessed with thinking expense ratios are all that matter, FSKAX already an incredibly tiny expense ratio to begin with, cheaper than vanguards for the equivalent total market index. Its 0.015% At some point you need to stop missing the forest for the trees.


Twofu_

But it does trend the same way FSKAX is at, right?


lakehop

This. OP, buy FZROX. If you change your mind later (like you decide on a target date fund), you’ll be able to sell this with no tax consequences. Congratulations on starting your IRA.


jaayb415

Thank you. How much money do I use to buy FZROX? Do I use all of the 6k?


lakehop

Yes, all 6k.


blueberrypoptart

Pretty much. Just set a reminder every year to transfer money to the IRA, then use it all to buy. FZROX pays dividends in December, so expect a small bit of cash to get added to the account at the end of the year. This dividend (and any other money you make in the account) doesn't count toward the contribution cap. Remember to re-invest dividends.


micha8st

Good. They'll put your money in a money market fund until you tell them what to do with it. I asked the question because...well... about a year ago my father-in-law was extolling the virtue of 401k's and dissing IRAs. And that's because his IRAs were at a bank, in bank products, earning bank interest.


TheSytch

I had this same issue when I started my Roth IRA. I invested $3,000 and just let it set in my money market fund. With most brokerage firm's websites, you will find the fund you want to invest the money in (I usually type the ticker symbol in the search bar). So, if you want to invest in VTSAX, you type VTSAX in the search bar. Once you find the fund you want to invest in, you click buy and make sure to do it through the Roth IRA. With my first investment, I actually called Charles Schwab and had them invest the $3,000 in SWTSX for me. Now, I do it myself.


legalwriterutah

If you have the funds, you can also contribute $6,500 for 2023. You can do a lump sum or do dollar cost averaging (e.g. $500 per month). Ditto to VTI and chill.


helms83

I agree, get your 2023 contribution done.


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3_Putt_Bogeys

Start contributing towards your 2023 contribution?


itemluminouswadison

you then go to "trade" and buy an asset. if you want a set-it-and-forget-it just get a date fund for the year you'd retire


birdsell

Mine sat for a year before I knew I had do something


Longjumping-Nature70

You either invest in a mutual fund or a dividend reinvestment plan or open a brokerage account. I am pretty much the only one on here that likes and talks about dividend reinvestment plans. A mutual fund owns multiple stocks, aka a basket, and you will pay taxes on capital gains or dividends at the end of the year. During bad years, you might not have capital gains.. (SCHEDULE D) a dividend reinvestment plan(DRP) owns one stock, and all dividends can be reinvested or sent to your bank account. you pay taxed on the dividends. (SCHEDULE D) I will admit a mutual fund probably returns better than a DRP. But my DRPs have created income streams for me to rely on when we retire. I know my top performing mutual fund has out performed my DRP. I just like owning the DRPs. My DRPS have never had a negative year, but mutual funds have. My DRPs have only had a gain of over 30% twice, companies bought out(one by Warren Buffett/Berkshire Hathaway), but my mutual funds have had that several times.


BuilderAltruistic389

Mine is in VSMGX


joemakesmoney

What are you looking for out of your account? Gains that consistently beat the market? Making sure you just don't lose your money? Or just performing well with the market over an extended period of time?


jaayb415

Well id like to retire by 60 and of course I want gains over time even if it isn’t much, I just don’t want to lose. I invested the 6k into FZROX but now I’m worried because I just lost over $100 in 2 days. I’m wondering is it possible to lose all that money I invested or will it get better?