vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Here is what that 1% extra service charge will cost you: Fund with a 1% service charge: Annual Fee Paid Year 1 - $60.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $301.00 Total Fees Year 1 through 25: $3,782 Fund with a 2% service charge: Annual Fee Paid Year 1 - $121.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $472.00 Total Fees Year 1 through 25: $6,489 That's a total of $2,707 in extra fees over 25 years on just the investment you make this year! Next year if you invest the same amount in your 401k that will be another $2,707 paid over 25 years to the management company. This pattern repeats EACH year you pay the higher management fee. Trust me, if you invest that money in stock instead of paying it as fees, you'll have a whole lot more money saved when it's time to retire. My advice, pick a percentage you're comfortable with in stocks at your age, maybe 85 - 90%, and pick the stock funds with the lowest management fees (the remaining 10 - 15% should go into a fixed fund). Make sure you pick at least some of your stock money, I do 20 - 25%, and select a diverse (lots of different countries) international fund. For any retirement money you plan to save above the 4% getting matched by your company, set up a Roth IRA. That will give you the freedom to invest in any stocks or funds you want. Find some low-cost index funds (such as VTI for stocks, and BND for bonds) and put your money in those. Invest the same amount every month, automatically, and your cost average will work itself out through up markets and down. Good luck!"
The main factor should be what sorts of emergencies you are trying and also need to protect yourself against. Overall I'd say at least 6-9 months of expenses, adjusted for the above factors. More might be better but I'd probably keep that in a different type of investment vehicle, mainly because it doesn't really need to be accessible instantaneously like your normal emergency fund would need to be.
Rs 10,000 is a small but good amount to begin with. I would suggest you start by investing in some good mutual funds. Do some research, a balance mutual fund is less risky less returns compared to a equity mutual fund. The other option is directly investing in stock market, however this needs some experience and you would need to open demat and trading accounts that would cost money to open and maintain.
Vanguard 500 Index Investor portfolio(VFINX) has .38% in cash as an example here where you could look at any open-end mutual fund's portfolio and notice that there may well be some in cash as part of how the fund is managed. It’s the Execution, Stupid would be one of a few articles that looks at the idea of ""tracking error"" or how well does an index fund actually track the index where it can be noted that in some cases, there can be a little bit of active management in the fund. Just as a minor side note, when I lived in the US I did invest in index funds and found them to be a good investment. I'd still recommend them though I'd argue that while some want to see these as really simple investments, there can be details that make them quite interesting to my mind. How is its price set then? The price is computed by taking the sum value of all the assets of the fund minus the liabilities and divided by the number of outstanding shares. The price of the assets would include the closing price on the stock rather than a bid or ask, similar pricing for bonds held by the fund, derivatives and cash equivalents. Similarly, the liabilities would be costs a fund has to pay that may not have been paid yet such as management fees, brokerage costs, etc. Is it a weighted average of all the underlying stock spreads, or does it stand on its own and stems from the usual supply & demand laws ? There isn't any spread used in determining the ""Net Asset Value"" for the fund. The fund prices are determined after the market is closed and so a closing price can be used for stocks. The liabilities could include the costs to run the fund as part of the accounting in the fund, that most items have to come down to either being an asset, something with a positive value, or a liability, something with a negative value. Something to consider also is the size of the fund. With over $7,000,000,000 in assets, a .01% amount is still $700,000 which is quite a large amount in some ways."
"Since the other answers have covered mutual funds/ETFs/stocks/combination, some other alternatives I like - though like everything else, they involve risk: Example of how these other ""saving methods"" can be quite effective: about ten years ago, I bought a 25lb bag of quinoa at $19 a bag.  At the same company, quinoa is now over $132 for a 25lb bag (590%+ increase vs. the S&P 500s 73%+ increase over the same time period).  Who knows what it will cost in ten years.  Either way, working directly with the farmers, or planting it myself, may become even cheaper in the future, plus learning how to keep and store the seeds for the next season."
There are three basic concepts finance (as far as I'm concerned). Liquidity is basically an asset's spendability.  Assets range in liquidity from cash (very liquid) to real estate (not very liquid).  You can spend cash immediately, while real estate must first be converted to cash.   Another important concept is your time horizon.  When do you need your money.  Money you need in the near term should be kept in very liquid assets, while money you won't need for a significantly long time can be tied in to something much less liquid. Volatility is the degree to which an assets value is predictable from day to day.  Cash and guaranteed savings accounts have very low volatility, while a stock portfolio will fluctuate in value from day to day, sometimes a lot and sometimes you can lose your initial investment. So really, you need to determine what you need or want this money for, and depending on when you'll need it you can make decisions about whether or not to invest it, or keep it in a savings account, or keep it in literal actual cash. Your TFSA is maxed for the year, so that's out.  Do you have an emergency fund?  Do you want to travel or have other more near term desires that cost money?  If you have a solid financial foundation and already have an emergency fund, you may want to set up a brokerage account and invest in an index fund.  You should not invest money in the stock market unless you are ready to leave it there for at least a few years.  Stocks are volatile but over a long enough period the market generally goes up. In your search for the right index fund, watch out for fees.  Most big brokers will have a list of funds you can invest in with no up front fees and no commission.  The fund itself will charge an expense ratio, look for an index fund with an expense ratio around 0.10%.  This means you'll pay 0.10% of your holdings each year to the fund manager.   No matter how much money we're talking about, I wouldn't put more than half in the market.  Dip your toe in, get used to the value fluctuating.  Don't start reading about technical analysis and derivative trading.  Just put your money in a very low fee big market index and let it ride.
One share costs the 202 $. You need to invest 3000 $ total at a minimum, meaning you have to buy some 14.9 shares at minimum. You should not worry about the exact number of shares, they are just to keep track, and you can buy every decimal part of them too. For example, if you invest now 5000 $, you will get 24.7525 shares. Next year, if they are for example worth 220 $ per share, you have a value of 24.7525 * 220 = 5445.55 $ It depends on the offering company, but that (a certain fixed amount per paycheck) is a typical way to invest (and a good way - you implictly take advantage of prices changing a bit - you buy more shares when the price is down and less when it's up). Probably you can make it an automated deduction from your checking account, or you send it every week/month/whenever. Good plan!
Rule of thumb: To retire with a yearly income of $X, you need to save $(20*X) -- in other words, the safe assumption is that you'll average 4% returns on your stabilized savings/investments. In the case of retiring with a $50k passive pretax income, that means you need savings of $1M by the time you retire. If you want the $50,000 to be real post-tax spendable dollars, and your savings aren't in something like a Roth 401k or Roth IRA, increase that proportionately to account for taxes. How you get there depends on what you start with, how much you put into it every year, how you invest it and how many years you have before your retirement date. Passive investment alone will not do it unless you start with a lot of money; passive ongoing investment may depending on how much you can make yourself save when. To find out whether any specific plan will do what you need, you have to work with real numbers.
Investing in mutual funds, ETF, etc. won't build a large pool of money. Be an active investor if your nature aligns. For e.g. Invest in buying out a commercial space (on bank finance) like a office space and then rent it out. That would give you better return than a savings account. In few years time, you may be able to pay back your financing and then the total return is your net return. Look for options like this for a multiple growth in your worth.
"While nothing is guaranteed - any stock market or country could collapse tomorrow - if you have a fairly long window (15+ years is certainly long), ETFs are likely to earn you well above inflation. Looking at long term ETFs, you typically see close to 10% annual growth over almost any ten year period in the US, and while I don't know European indexes, they're probably well above inflation at least. The downside of ETFs is that your money is somewhat less liquid than in a savings account, and any given year you might not earn anything - you easily could lose money in a particular year. As such, you shouldn't have money in ETFs that you expect to use in the next few months or year or even a few years, perhaps. But as long as you're willing to play the long game - ie, invest in ETF, don't touch it for 15 years except to reinvest the dividends - as long as you go with someone like Vanguard, and use a very low expense ratio fund (mine are 0.06% and 0.10%, I believe), you are likely in the long term to come out ahead. You can diversify your holdings - hold 10% to 20% in bond funds, for example - if you're concerned about risk; look at how some of the ""Target"" retirement funds allocate their investments to see how diversification can work [Target retirement funds assume high risk tolerance far out and then as the age grows the risk tolerance drops; don't invest in them, but it can be a good example of how to do it.] All of this does require a tolerance of risk, though, and you have to be able to not touch your funds even if they go down - studies have repeatedly shown that trying to time the market is a net loss for most people, and the best thing you can do when your (diverse) investments go down is stay neutral (talking about large funds here and not individual stocks). I think this answers 3 and 4. For 1, share price AND quantity matter (assuming no splits). This depends somewhat on the fund; but at minimum, funds must dividend to you what they receive as dividends.
Most important: Any gains you make from risking this sum of money over the next few years will not be life changing, but if you can't afford to lose it, then losses can be. Rhetorical question: How can you trust what I say you should do with your money? Answer: You can't. I'm happy to hear you're reading about the stock market, so please allow me to encourage you to keep learning.  And broaden your target to investing, or even further, to financial planning.  You may decide to pay down debt first.  You may decide to hold cash since you need it within a couple years. Least important: I suggest a Roth IRA at any online discount brokerage whose fees to open an account plus 1 transaction fee are the lowest to get you into a broad-market index ETF or mutual fund.
Its best to dollar cost average adding say 5%-10% a quarter into the fund. That's what Clark Howard would suggest.  Also make sure you do not need the money for 5 years, then you should be okay.   Its tough to lose money if you keep your money there for a long period of time.
The net return reported to you (as a percentage) by a mutual fund is the gross return minus the expense ratio.  So, if the gross return is X% and the expense ratio is Y%, your account will show a return of (X-Y)%.  Be aware that X could be negative too. So, with Y = 1, If X = 10 (as you might get from a stock fund if you believe historical averages will continue), then the net return is 9% and you have lost (Y/X) times 100% = 10% of the gross return. If X = 8 (as you might get from a bond fund if you believe historical averages will continue), then the net return is 7% and you have lost (Y/X) times 100% = 12.5% of the gross return. and so on and so forth.  The numbers used are merely examples of the returns that have been obtained historically, though it is worth emphasizing that 10% is an average return, averaged over many decades, from investments in stocks, and to believe that one will get a 10% return year after year is to mislead oneself very badly. I think the point of the illustrations is that expense ratios are important, and should matter a lot to you, but that their impact is proportionately somewhat less if the gross return  is high, but very significant if the gross return is low, as  in money-market funds.  In fact, some money market funds which  found that X < Y have even foregone charging the expense ratio  fee so as to maintain a fixed $1 per share price.  Personally,  I would need a lot of persuading to invest in even a stock fund with 1% expense ratio.
One thing to be aware of when choosing mutual funds and index ETFs is the total fees and costs. The TD Ameritrade site almost certainly had links that would let you see the total fees (as an annual percentage) for each of the funds. Within a category, the lowest fees percentage is best, since that is directly subtracted from your performance. As an aside, your allocation seems overly conservative to me for someone that is 25 years old. You will likely work for 40 or so years and the average stock market cycle is about 7 years. So you will likely see 5 or so complete cycles. Worrying about stability of principal too young will really cut into your returns. My daughter is your age and I have advised her to be 100% in equities and then to start dialing that back in about 25 years or so.
The standard advice is to have 3-6 months worth of expenses saved up in a highly liquid savings or money market account.   After you have that saved you could look to start investing.  I would recommend reading the bogleheads investment wiki (https://www.bogleheads.org/wiki/Getting_started).  Even if you aren't planning on following the bogle head's way of passive investing it will give you a lot of good info on options available to you to start investing.
"Since your 401k/IRA are maxed out and you don't need a 529 for kids, the next step is a plain ol' ""Taxable account."" The easiest and most hassle-free would be automatic contributions into a Mutual Fund.  Building on poolie's answer, I think mutual funds are much more automatic/hassle-free than ETFs, so in your case (and with your savings rate), just invest in the Investor (or Admiral) shares of VEU and VTI. Other hassle-free options include I-Bonds ($5k/year), and 5-year CDs."
"Books such as ""The Pocket Idiot's Guide to Investing in Mutual Funds"" claim that money market funds and CDs are the most prudent things to invest in if you need the money within 5 years. More specifically:"
To avoid having it become overly complicated, I suggest it be run as would a mutual fund. Mutual funds transact each evening to set a price. Transactions for purchases or sales are done at that price each evening.  Initially, you have a dollar amount invested for each person. You can calculate the percent of the 'fund' each has, and, assuming the total is under $10K, 7 digits after the decimal accuracy is enough to track each share to the 1/10 cent.  When new money is added, that night, you calculate the exact value of investments, and add the new funds, so each person now has a smaller share of the larger fund.  If you wish, you can normalize this to 'share value' so my initial investment of $1000 is 100 shares regardless of the total amount invested. Then when new money comes in, the 'shares' increase as well. This may feel better as a declining percent may just seem awkward, even though that's the case.
I don't know what you mean by 'major'. Do you mean the fund company is a Fidelity or Vanguard, or that the fund is broad, as in an s&P fund?  The problem starts with a question of what your goals are. If you already know the recommended mix for your age/risk, as you stated, you should consider minimizing the expenses, and staying DIY. I am further along, and with 12 year's income saved, a 1% hit would be 12% of a year's pay, I'd be working 1-1/2 months to pay the planner?  In effect, you are betting that a planner will beat whatever metric you consider valid by at least that 1% fee, else you can just do it yourself and be that far ahead of the game.  I've accepted the fact that I won't beat the average (as measured by the S&P) over time, but I'll beat the average investor. By staying in low cost funds (my 401(k) S&P fund charges .05% annual expense) I'll be ahead of the investors paying planner fees, and mutual fund fees on top of that. You don't need to be a CFP to manage your money, but it would help you understand the absurdity of the system.
Are you going to need any of the money in the next year or two, or are you saving it long term? Are you going to need any of it before you are 65?  If no to both, put in a Roth IRA with a Vanguard Target retirement fund.  If no to the first and yes to the second, put in the VTI index fund. If you want, you can keep 20-30% in a bond fund instead of 100% stock.  Every 3-12 months, log in and redistribute your funds to maintain the desired split if you'd like, but this is somewhat optional.  If you really, really want, set aside 5% for investing in a few companies you really believe in. You'll probably lose money on that investment, but it will reassure you that the rest of your money is wisely invested.
All of this does require a tolerance of risk, though, and you have to be able to not touch your funds even if they go down - studies have repeatedly shown that trying to time the market is a net loss for most people, and the best thing you can do when your (diverse) investments go down is stay neutral (talking about large funds here and not individual stocks). I think this answers 3 and 4. For 1, share price AND quantity matter (assuming no splits). This depends somewhat on the fund; but at minimum, funds must dividend to you what they receive as dividends. There are Dividend focused ETFs, which are an interesting topic in themselves; but a regular ETF doesn't usually have all that large of dividends. For more information, investopedia has an article on the subject. Note that there are also capital gains distributions, which are typically distributed to help offset capital gains taxes that may occur from time to time with an ETF. Those aren't really returns - you may have to hand most or all over to the IRS - so don't consider distributions the same way. The share price tracks the total net asset value of the fund divided by the number of shares (roughly, assuming no supply/demand split). This should go up as the stocks the ETF owns go up; overall, this is (for non-dividend ETFs) more often the larger volatility both up and down. For Vanguard's S&P500 ETF which you can see here, there were about $3.50 in dividends over 2014, which works out to about a 2% return ($185-$190 share price). On the other hand, the share price went from around $168 at the beginning of 2014 to $190 at the end of 2014, for a return of 13%. That was during a 'good' year for the market, of course; there will be years where you get 2-3% in dividends and lose money; in 2011 it opened at 116 and closed the year at 115 (I don't have the dividend for that year; certainly lower than 3.5% I'd think, but likely nonzero.)
Vanguard has a lot of mutual fund offerings.  (I have an account there.)  Within the members' section they give indications of the level of risk/reward for each fund.
Note, the main trade off here is the costs of holding cash rather than being invested for a few months vs trading costs from trading every month.  Let's start by understanding investing every month vs every three months.  First compare holding cash for two months (at ~0% for most Canadians right now) and then investing on the third month vs being invested in a single stock etf (~5% annually?).  At those rates she is forgoing equity returns of around  These costs and the $10 for one big trade give total costs of $16+$8+$10=$34 dollars.   If you were to trade every month instead there would be no cost for not being invested and the trading costs over three months would just be 3*$10=$30.  So in this case it would be better to trade monthly instead of every three months. However, I'm guessing you don't trade all $2000 into a single etf.  The more etfs you trade the more trading more infrequently would be an advantage.  You can redo the above calculations spliting the amount across more etfs and including the added trading costs to get a feel for what is best.  You can also rotate as @Jason suggests but that can leave you unbalanced temporarily if not done carefully.  A second option would be to find a discount broker that allows you to trade the etfs you are interested in for free.  This is not always possible but often will be for those investing in index funds.  For instance I trade every month and have no brokerage costs. Dollar cost averaging and value averaging are for people investing a single large amount instead of regular monthly amounts.  Unless the initial amount is much much larger than the monthly amounts this is probably not worth considering. Edit: Hopefully the above edits will clarify that I was comparing the costs (including the forgone returns) of trading every 3 months vs trading every month.
The simplest way is just to compute how much money you'd have to have invested elsewhere to provide a comparable return. For example, if you assume a safe interest rate of 2.3% per year, you would need to have about $520,000 to get $1,000/month.
In almost every circumstance high expense ratios are a bad idea. I would say every circumstance, but I don't want backlash from anyone. There are many other investment companies out there that offer mutual funds for FAR less than 1.5% ratio. I couldn't even imagine paying a 1% expense ratio for a mutual fund.  Vanguard offers mutual funds that are significantly lower, on average, than the industry. Certainly MUCH lower than 1.5%, but then again I'm not sure what mutual funds you have, stock, bonds, etc.  Here is a list of all Vanguard's mutual funds. I honestly like the company a lot, many people haven't heard of them because they don't spend nearly as much money on advertisements or a flashy website - but they have extremely low expense ratios. You can buy into many of their mutual funds with a 0.10%-0.20% expense ratio. Some are higher, but certainly not even close to 1.5%. I don't believe any of them are even half of that. Also, if you were referring to ETF's when you mentioned Index Fund (assuming that since you have ETFs in your tag), then 0.20% for ETF's is steep, check out some identical ETFs on Vanguard. I am not a Vanguard employee soliciting their service to you. I'm just trying to pass on good information to another investor. I believe you can buy vanguard funds through other investment companies, like Fidelity, for a good price, but I prefer to go through them.