HOME
One more check: Are you really ready to invest?
You're not ready to invest unless you have gotten your insurance and banking relationships in order, taken maximum advantage of tax-deferred retirement plans and saved an emergency reserve. Remember, the strategy is to "buy and hold." That means not pulling your money out of the market except in truly unusual circumstances.
If you're not ready to invest, go to the steps toward simplifying your finances, starting with "1. Declare Victory."
If you are ready to invest, here's what's next. Start with a money market fund, then add a total stock market index fund and a total bond market index fund. You'll need a $3000 minimum to open each account. To get started, either:
- Call the Vanguard Group at 1-800-662-7447 or
- Visit the Vanguard Group's website for new accounts
The specific funds you're interested in are:
- Prime Money Market Fund (fund number 30)
- Total Stock Market Index Fund (fund number 85)
- Total Bond Market Index Fund (fund number 84)
If even a
$3000 account minimum is beyond your finances right now,
you can get started investing with a well-regarded mutual fund
company. This company is called TIAA-CREF, and it originated as a
retirement fund for higher education. I have some money invested with this
company through my current and past employers. TIAA-CREF is very good in
quality and service. I don't like their funds quite as much as Vanguard's,
but TIAA-CREF has a lower minimum, of $1500.
To get started, either:
- Write to ask for a "Getting Started Kit":
TIAA-CREF Mutual Funds P.O. Box 8009
Boston MA 02266-8009
or
- Visit the TIAA-CREF Mutual Fund web page
The specific funds you're interested in are:
- Money Market Fund (similar to Vanguard's Prime Money Market Fund)
- Equity Index Fund (An index fund that uses a slightly different index from Vanguard's Total Stock Market Index Fund.)
- Bond Plus Fund (well-diversified fund holding bonds and similar assets, but not my favorite in that it's not an index fund.)