A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:
Concurrently: Saving for two or more financial goals at the same time.
Sequentially: Saving for one financial goal at a time in a series of steps.
Each method has its pros and cons. Here’s how to decide which method is best for you.
Sequential goal-setting
Pros
You can focus intensely on one goal at a time and feel a sense of completion when each goal is achieved. It’s also simpler to set up and manage single-goal savings than plans for multiple goals. You only need to set up and manage one account.
Cons
Compound interest is not retroactive. If it takes up to a decade to get around to long-term savings goals (e.g., funding a retirement savings plan), that’s time that interest is not earned.
Concurrent goal-setting
Pros
Compound interest is not delayed on savings for goals that come later in life. The earlier money is set aside, the longer it can grow. Based on the Rule of 72, you can double a sum of money in nine years with an 8 percent average return. The earliest years of savings toward long-term goals are the most powerful ones.
Cons
Funding multiple financial goals is more complex than single-tasking. Income needs to be earmarked separately for each goal and often placed in different accounts. In addition, it will probably take longer to complete any one goal because savings is being placed in multiple locations.
Research findings
Working with Wise Bread to recruit respondents, I conducted a study of financial goal-setting decisions with four colleagues that was recently published in the Journal of Personal Finance. The target audience was young adults with 69 percent of the sample under age 45. Four key financial decisions were explored: financial goals, homeownership, retirement planning, and student loans.
Results indicated that many respondents were sequencing financial priorities, instead of funding them simultaneously, and delaying homeownership and retirement savings. Three-word phrases like “once I have…,", “after I [action],” and “as soon as…,” were noted frequently, indicating a hesitancy to fund certain financial goals until achieving others.
The top three financial goals reported by 1,538 respondents were saving for something, buying something, and reducing debt. About a third (32 percent) of the sample had outstanding student loan balances at the time of data collection and student loan debt had a major impact on respondents’ financial decisions. About three-quarters of the sample said loan debt affected both housing choices and retirement savings.
Actionable steps
Based on the findings from the study mentioned above, here are five ways to make better financial decisions.
1. Consider concurrent financial planning
Rethink the practice of completing financial goals one at a time. Concurrent goal-setting will maximize the awesome power of compound interest and prevent the frequently-reported survey result of having the completion date for one goal determine the start date to save for others.
2. Increase positive financial actions
Do more of anything positive that you’re already doing to better your personal finances. For example, if you’re saving 3 percent of your income in a SEP-IRA (if self-employed) or 401(k) or 403(b) employer retirement savings plan, decide to increase savings to 4 percent or 5 percent.
3. Decrease negative financial habits
Decide to stop (or at least reduce) costly actions that are counterproductive to building financial security. Everyone has their own culprits. Key criteria for consideration are potential cost savings, health impacts, and personal enjoyment.
4. Save something for retirement
Almost 40 percent of the respondents were saving nothing for retirement, which is sobering. The actions that people take (or do not take) today affect their future selves. Any savings is better than no savings and even modest amounts like $100 a month add up over time.
5. Run some financial calculations
Use an online calculator to set financial goals and make plans to achieve them. Planning increases people’s sense of control over their finances and motivation to save. Useful tools are available from FINRA and Practical Money Skills.
What’s the best way to save money for financial goals? It depends. In the end, the most important thing is that you’re taking positive action. Weigh the pros and cons of concurrent and sequential goal-setting strategies and personal preferences, and follow a regular savings strategy that works for you. Every small step matters!
Can you retire at 50? On average, people usually retire at 65. But what if you want to retire 15 years earlier than that like at 50? Is it doable? Below are 10 easy steps to take to retire at 50. Retiring early can be challenging. Therefore, SmartAsset’s free tool can match you with  a financial advisor who can help to work out and implement a retirement income strategy for you to maximize your money.
10 Easy & Simple Steps to Retire at 50:
1. How much you will need in retirement.
The first thing to consider is to determine how much you will need to retire at 50. This will vary depending on the lifestyle you want to have during retirement. If you desire a lavish one, you will certainly need a lot.
But according to a study by SmartAsset, 500k was found to be enough money to retire comfortably. But again that will depends on several factor.
For example, you will need to take into account where you want to live, the cost of living, how long you expect to live, etc.
Read: Can I Retire at 60 With 500k? Is It Enough?
A good way to know if 500k is possible to retire on is to consider the 4% rule. This rule is used to figure out how much a retiree should withdraw from his or her retirement account.
The 4% rule states that the money in your retirement savings account should last you through 30 years of retirement if you take out 4% of your retirement portfolio annually and then adjust each year thereafter for inflation.
So, if you plan on retiring at 50 with 500k for 30 years, using the 4% rule you will need to live on $20,000 a year.Â
Again, this is just an estimation out there. You may need less or more depending on the factors mentioned above. For example, if you’re in good health and expect to live 40+ years after retiring at 50, $500,000 may not be enough to retire on. That’s why it’s crucial to work with a financial advisor.
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Managing your finances can be overwhelming. We recommend speaking with a financial advisor. The SmartAssetâs free matching tool will pair you with up to 3 financial advisors in your area.
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2. Maximize your tax-advantaged retirement accounts.
Once you have an idea of how much you need in order to retire at 50, your next step is to save as much as possible at a faster rate. If you are employed and you have a 401k plan available to you, you should definitely participate in it. Nothing can grow your retirement savings account faster than a 401k account.
See: How to Become a 401k Millionaire.
That means, you will need to maximize your 401k contributions, for example. In 2020, and for people under 50, the 401k contribution limit is $19,500. Also, take advantage of your company match if your employee offers a match.
In addition to the maximum contribution of $19,500, your employer also contributes. Sometimes, they match dollar for dollar or 50 cents for each dollar the worker pays in.
In addition to a 401k plan, open or maximize your Roth or traditional IRA. For an IRA, it is $6,000. So, by maximizing your retirement accounts every year, your money will grow faster.
3. Invest in mutual or index funds. Apart from your retirement accounts (401k, Roth or Traditional IRA, SEP IRA, etc), you should invest in individual stocks or preferably in mutual funds.Â
4. Cut out unnecessary expenses.
Someone with the goal of retiring at 50 needs to keep an eye on their spending and keep them as low as possible. We all know the phrase, “the best way to save money is to spend less.”
Well, this is true when it comes to retiring 15 years early than the average. So, if you don’t watch TV, cancel Netflix or cable TV. If your cell phone bill is high, change plans or switch to another carrier. Don’t go to lavish vacations.
5. Keep an eye on taxes.
Taxes can eat away your profit. The more you can save from taxes, the more money you will have. Retirement accounts are a good way to save on taxes. Besides your company 401k plan, open a Roth or Traditional IRA.
6. Make more money.
Spending less is a great way to save money. But increasing your income is even better. If you need to retire at 50, you’ll need to be more aggressive. And the more money you earn, the more you will be able to save. And the faster you can reach your early retirement goal.
7. Speak with a financial advisor.
Consulting with a financial advisor can help you create a plan to. More specifically, a financial advisor specializing in retirement planning can help you achieve your goals of retiring at 50. They can help put in a place an investment strategy to put you in the right track to retire at 50. You can easily find one in your local area by using SmartAsset’s free tool. It matches users with financial advisors in just under 5 minutes.
8. Decide how you will spend your time in retirement.
If you will spend a lot of time travelling during retirement, then make sure you do research. Some countries like the Dominican Republic, Mexico, Panama, the Philippines, and so many others are good places to travel to in retirement because the cost of living is relatively cheap.
While other countries in Europe can be very expensive to travel to, which can eat away your retirement money. If you decide to downsize or sell your home, you can free up more money to spend.
9. Financing the first 10 years.
There is a penalty of 10% if you cash out your retirement accounts before you reach the age of 59 1/2. Therefore, if you retire at 50, you’ll need to use money in other accounts like traditional savings or brokerage accounts.
10.Put your Bonus, Raise, & Tax Refunds towards your retirement savings.
If retiring at 50 years old is really your goal, then you should put all extra money towards your retirement savings. That means, if you receive a raise at work, put some of it towards your savings account.
If you get a tax refund or a bonus, use some of that money towards your retirement savings account. They can add up quickly and make retiring at 50 more of a reality than a dream.
Retiring at 50: The Bottom Line:
So can I retire at 50? Retiring at 50 is possible. However, it’s not easy. After all, you’re trying to grow more money in less time. So, it will be challenging and will involve years of sacrifices, years living below your means and making tough financial decisions. However, it will be worth it in the long run.
Read More:
How Much Is Enough For Retirement
How to Grow Your 401k Account
People Who Retire Comfortably Avoid These Financial Advisor Mistakes
5 Simple Warning Signs Youâre Definitely Not Ready for Retirement
Speak with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning to retire at 50, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post How To Retire At 50: 10 Easy Steps To Consider appeared first on GrowthRapidly.
Are you looking for your Citibank routing number? It’s quite easy and simple. Below is how to find it.
If youâre sending or receiving money to friends and family members using your Citibank account, you need to make sure youâre having the right routing number.
CIT Bank Savings Rates: How Much Can You Earn
What is my Citibank routing number?
In brief, the Citibank routing number is a nine-digit number that the bank uses to identify themselves. Citibank routing number is sometimes known as ABA numbers, check routing numbers or routing transit numbers.
You need your routing numbers for several reasons. For instance, you need it for:
To set up direct deposit
For ACH payments;
To transfer funds between accounts at different banks;
For bill payments;
To receive government benefits;
To receive tax refunds;
For wire transfers;
To have payments like paycheck deposited into your account.
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Citibank Routing Number For Each State
Citibank routing number is different for each state. So, itâs important to know it. But your Citibank routing number is associated in the state you opened your bank account.
So, if you have moved to Illinois for example, but you had opened Citibank account in New York, your routing number is associated in New York.
It is as simple as that.
Here is a table of the Citibank routing number by each state:
State
Citibank Routing Number
Citibank Northern California (CA)
321171184
Citibank Delaware
31100209
Citibank Illinois (IL)
271070801
Citibank Nevada
322271724/ 322271779/ 321070007
Citibank New York (NY)
21000089
Citibank Texas (TX)
113193532
Citibank Washington DC
254070116
Citibank Connecticut
221172610
Citibank Florida
266086554
Citibank Maryland
52002166
Citibank New Jersey (NJ)
21272655
Citibank South Dakota
21000089
Citibank Virginia
254070116
Citibank California, Southern
322271724
If your state is not included in here, call Citibank at 800-374-9700 for assistance.
Citibank routing number to make ACH Transfers
To make an ACH transfer, youâre going to have to choose the Citibank routing number for your particular state.
For example, if you live in Florida, then you will use the Citibank routing number for Florida which is 266086554. If you live in another state, look at the ACH routing number for your particular state in the table above.
Citibank routing numbers for Wire Transfers
Wire transfers are a quicker way to send money than an ACH transfer. However, there is going to be a fee.
If youâre making a domestic wire transfer, however, you will need to use the routing number in your state, see the table above.
To make domestic wire transfers, and in addition to the routing number, you will also need the following:
The name of of the person whom youâre making the transfer to;
The name and address of the personâs bank;
The personâs account number as well as the routing number.
For international wire transfers, you will need both the Citibank routing number in your state and a SWIFT Code: CITIUS33. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication.
In addition, you will need the following to make an international wire transfer:
The name of of the person whom youâre making the transfer to;
The name and address of the personâs bank;
The personâs account number
Purpose of the payment; and
The currency being sent
Where to find your routing number?
So, you want to know where to get your routing number from Citibank? Hereâs where to get it:
Your Citibank personal check
You can find your Citibank routing number on the bottom left-corner of a check. However, note the routing number on your check might be different than the routing number for a wire transfer. So, before youâre making a transaction, make sure you check with your bank to get the accurate routing number.
Learn How to Write A Check.
Citibank routing number on this page
We have listed the routing numbers for each state on the table above for ACH transfers. We have also listed the routing number for domestic and international wire transfers.
Your Bank statements
You can find your routing number as well on your monthly bank statements.
Citibank online
Your can find your routing number online by simply going into online banking.
On the Federal Reserve website
You can look up your routing number on the Federal Reserve website.
Customer service
Lastly, you can always call customer service at 800-374-9700: to get your routing number. Itâs available 24 hour a day, 7 days a week. However, note that you will have to provide some details to identify yourself.
Which routing number to use?
Depending on your financial transactions, you will need to use different routing numbers.
Domestic ACH Transfer
For domestic transfers, use the ABA routing number from your state (see the table above).
For Domestic Wire Transfer
Use the Citibank domestic wire transfer number in your state in the table above.
For international wire transfers
Use your state routing number: and the SWIFT code: CITIUS33
Citibank routing number: bottom lime
In conclusion, if you have a Citibank account, youâll likely need to your routing number. You will need to set up direct deposit, to set up automatic payments, or to wire transfer. So, itâs important to know it and keep it handy. Also, make sure you verify the number before you make a transaction. If you miss one digit or get one digit wrong, your money can go somewhere else.
Related:
Wells Fargo Routing Number
How to Find Your Well Fargo Routing Number for Texas
Speak with the Right Financial Advisor
If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
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0.75% APY
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The post How to Find My Citibank Routing Number appeared first on GrowthRapidly.
How long does it take to buy a house? The answer is: it depends. You can buy a house in a matter of weeks or it can take you anywhere from 4 to 6 months. The question is how ready are you? It can take a long time, and that’s just learning about various mortgage options or improving your credit score.
So understanding the various factors involved in buying a house can give you an estimate of how long it will take you to buy the house
Check out now: 5 Signs You Are Not Ready To Buy A House
How long does it take to buy a house? A step-by-step guide.
It can take a homebuyer a few weeks to several months to complete the home buying process. But when determining how long it will take you to buy a house, you first have to find out if you will be pre-approved for a mortgage. There is no sense of shopping for a house to then realize you can’t afford it.
If you are interested in comparing the best mortgage rates through LendingTree click here. Itâs completely free.
I. How long does it take to get a pre-approved mortgage letter in order to buy a house?
If you’re serious about buying a house, it’s important to get pre-approved for a mortgage. So when it’s time to make an offer, the seller will know you’re serious. If you don’t have one handy, the seller will likely move to the next buyer.
Getting pre-approved for a mortgage in order to buy a house can take longer. That is because you have to make sure your financial situation is in shape. For example, your income-to-debt ratio, your down payment, and your credit score must be good. That’s exactly what a mortgage lender will look at.
Even when these things are in order, shopping and comparing mortgage rates and fees can take several weeks.
Let’s take a look on how long it will take you to get these things in shape before buying a house.
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A. How good is your credit score?
A low credit score can make buying a house take longer, because it can take months to a year to improve a bad credit score.
A conventional loan will usually require a 640+ credit score.
In fact, your credit score is the number 1 item mortgage lenders look at to decide whether to offer you a mortgage. And if it is not where it’s supposed to be, you might get rejected.
Luckily for you there are other ways to get a loan with much lower credit score: FHA loans.
FHA loans only require a credit score of 580 with 3.5% down payment. You may get qualified with a 500 credit score, but you’ll have to come with a 10% down payment.
So before you get into the fun part of shopping for a mortgage or visiting homes, it’s best to know what your credit score is and take steps to improve it.
You can get a free credit score at Credit Sesame.
B. Fix errors on your credit report.
Fixing errors on your credit report in order to get pre-approved for a loan in order to buy a house can take 30 days.
According to Transunion, “most investigations are completed within 2 weeks, but some may take up 30 days.”
Again, we recommend you get a free credit report at Credit Sesame. A credit report will give you a detail analysis of your credit history, how much debt you owe, and how creditworthy you are, etc. If there are any errors or inaccuracies, fix them immediately so there’s no surprise when you’re actually applying for a mortgage.
The best way to do that is by filing a Transunion dispute or Equifax dispute.
C. Do you have a down payment for the house?
How long it will take you to buy a house will also depend on whether or not you already have money saved up for a down payment.
Unless you’re going to buy the house with outright cash, you’ll need a down payment. And saving for a down payment can take a long time. Depending on your income and expenses, saving for a down payment on a house can take years.
Assuming, for example, you want to buy a house that will cost you $450,000, and you’re using a conventional loan to finance the house. With a 20% down payment, you will need to come up with $90,000.
Let’s say again, because of other monthly expenses, you can only save $1500 a month for the down payment.
You see how long it will take you to save for a down payment to buy the house? 5 years. And that doesn’t even take into account other upfront costs of buying a house, such as closing cost.
While it’s possible to get a mortgage with a down payment as low as 3.5% of the home purchase price, it’s advisable to put at least 20% down. The reason is because you will avoid paying private mortgage insurance (PMI), which protects the lenders in case you default on your mortgage.
Home buyers with a down payment below 20% are usually charged with PMI.
Another reason for a larger down payment is that it reduces the cost of the mortgage, grows equity much faster, and saves you on interest over the life of the loan.
As you can see, it can take you as much as 5 years from the time you’re thinking about buying the house to the time you’re actually ready to start the process.
But once you have taken care the things above, buying a house can go a lot faster.
II. How long does it take to find a real estate agent?
Average time: 1 day to a month
Once you have been pre-approved for a mortgage, the next step is to find an experienced real estate agent. Finding a good real estate agent can take a day to a month. Websites such as Zillow and Redfin list real estate agents you can use.
III. Shopping for a home.
Average time: a few weeks to a few months
With the help of a real estate agent and your own due diligence, finding a home can can go faster or take longer depending on available homes, the season and your desired location.
But experts say on average it can take a minimum of three weeks to a few months.
IV. Making an offer, negotiation, and inspection.
Average time: 1 to 10 days
Once you have found the home of your dream, the next step is to make an offer. You and the seller can go back and forth negotiating the price.
Once your offer has been accepted, you and the seller sign something called a purchase agreement. Then, the next step is to hire a professional to inspect the home for defects. Depending on your state, a home inspection must be completed within 10 days. And if the inspection finds some defects in the house, that could delay the process.
V. How long does it take to close on a house?
Average time: 30 to 45 days.
Once the inspection is done, your lender will need to officially approve you for the loan. And depending on the lender, it can also affect how long it takes to buy a house. You may need to provide additional documents. But the lender will need to assess the home for its value. And depending on the program (whether it’s conventional loan or FHA loan) it can take anywhere from 30 to 45 days to close on a home.
Bottom line
When asking yourself this question: “how long does it take to buy a house?” The answer is : it depends. If you have your credit score, your down payment, your other finances under control, you can buy your house in two months or less. But if you have to save for a down payment, fix errors on your credit report, raise your credit score, the whole home buying process can take years.
Click here to compare mortgage rates through LendingTree. Itâs completely FREE
Still wondering how long it takes to buy a house? Read the following articles:
5 Signs You’re Not Ready To Buy A House
10 First Time Home Buyer Mistakes To Avoid
3 Signs You’re Not Ready to Refinance Your Mortgage
The Biggest Mistakes Millennials Make When Buying a House
7 Signs You’re Ready To Buy A House
Work with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). So, find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post How Long Does It Take To Buy A House? appeared first on GrowthRapidly.
If you don’t have the time, the money or the expertise to buy individual stocks or bonds to build your investment portfolio, then consider the best Vanguard index funds.
Index funds are a good way to start saving and investing for retirement.
One reason is because the chance of making more money investing in index funds is far higher than it is investing in individual stocks, especially if you are a beginner investor.
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As the master of value investing, Warren Buffett, once said “a low-cost index fund is the most sensible equity investment for the great majority of investors.” “By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals.”
But how do you find and choose among the best Vanguard index funds? Don’t worry, GrowthRapidly can help make your choice easier.
On this page:
Index funds vs mutual funds
Index funds are one of the easiest and cheapest ways to invest in the stock market. As opposed to a mutual fund, which is actively managed by a fund manager, index funds are passive.
This means that index funds attempt to track the performance of a particular index, such as the Standard & Poor’s 500 index of 500 large U.S. company stocks or the CRSP US Small Cap Index.
So, when you invest in the Vanguard S&P 500 Index fund (which we’ll discuss in more detail below), you’re essentially buying a piece of the 500 largest publicly traded US companies.
Index funds don’t jump around; they stayed invested in the market. Again, they simply track the performance of the stock index.
Related: What is a mutual fund?
Whereas with a mutual fund, fund managers might make mistake by not being invested when the market goes up or by being too aggressive when the market goes down.
That doesn’t mean mutual funds are not good investments. In fact, they are great investment vehicles. But when it comes to long term investments, index funds are the best. However, these 8 mutual funds are great for long term investing.
Like a mutual fund, you can buy an index fund through a fund company like Vanguard.
The main advantage of a Vanguard index fund is its low-cost, which is usually less than 1% annually. Another benefit of Vanguard index funds is that they are diversified. Like mutual funds, they invest to multiple companies, thus spreading out the risk.
One of the downside with index funds, however, is that they won’t outperform the market they track.
Get Matched With 3 Fiduciary Financial Advisors
Investing in the stock market can be intimidating and overwhelming. We recommend speaking with a financial advisor. The SmartAssetâs free matching tool will pair you with up to 3 financial advisors in your area.
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1. Answer these few easy questions about your current financial situation
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Why choosing the best Vanguard index funds to invest your money?
There are thousands of fund companies (such as Fidelity, Schwab, JP Morgan) where you can buy index funds. Different companies have different experiences and expertise with different type of funds. So, it can be difficult to know which one is the best.
Here are four main factors to consider when looking to buy the best index funds for long term investments:
The company: Is it a reputable and well-known company with a great track record?
Fees: Another major factor to consider in picking a fund company is its cost. Excessive fees have a negative effect on your investment return. These fees are deducted from your index fund’s balance every year. Other fees can apply as well. So always find a company with a low fee.
Reasonable minimum investment: Will you be able to invest with as little as $1000?
Performance: Although past performance does not guarantee future performance, look for a fund company with a strong record of performing well against its competitors over the short and long term as well.
If you are an intelligent investor who has done his or her research, you will conclude that among the various fund companies out there, Vanguard comes out on top.
Jack Bogle, who recently died and who founded the firm Vanguard Group, invented the index fund in 1976.
Today, Vanguard is one of the World’s biggest and the best investment funds with approximately $5.6 trillion in assets.
Moreover, Vanguard has the best index funds because of their ability to keep their operating fees so low. Vanguard has all types of stock and bond index funds and their fees are the lowest.
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The advantages and disadvantages of Vanguard Index funds.
Pros of the best vanguard index funds
By now, you know that an index fund is well diversified. But you might know these two other pros that make Vanguard index funds the best:
Good return: Vanguard index funds generally delivers a good return because their expenses are relatively low. The average Vanguard Index fund has an expense ratio of 0.2% per year (compare that to the average index fund operating expenses of 1.4% per year.) A 1.2% difference can be a significant difference on your return. Operating expenses are also lower because ongoing research is not needed to identify companies to invest in.
Tax-friendly: not only Vanguard index funds have lower operating expenses, which help increase your returns, they are also tax-friendlier when you invest outside of retirement accounts. Because a mutual fund is actively managed, they tend to jump around by selling and buying stocks more frequently. By doing that, it increases a fund’s taxable capital gains distribution. Whereas an index fund stays invested and not trying to jump around.
Cons of the best Vanguard index funds
Despite their low costs and tax-friendliness, their minimum investment while seem reasonable, might not be for the beginner investor with little money to invest.
Most Vanguard index funds requires a $3,000 minimum initial investment. Retirement account investors who plan on starting with less might be at a disadvantage.
Moreover, Vanguard has an overwhelming number of index funds to choose from. That can make it tedious for an investor to decide which ones are the best. But that’s why we have compiled the top Vanguard index funds for you.
The 10 Best Vanguard Index Funds to Buy in August 2020:
Now that you know what an index fund is and why investing Vanguard index funds makes good sense, in no particular order, below are 10 of the best Vanguard index funds to add to your investment portfolio.
Vanguard S&P 500 Index Admiral (VFIAX)
Of all the Vanguard index funds in this list, the Vanguard S&P index fund, which tracks the Standard & Poor’s 500, is perhaps the best Vanguard index fund. One reason is that the fund invest in 500 of largest U.S. companies with a few a midsize stocks.
Some of the big name stocks in this index fund includes Apple (AAPL), Microsoft (MSFT), and Google/Alphabet (GOOGL). Another reason to select this fund is that the cost is pretty low, (0.04%) if not the lowest of all the index funds.
Index fund cost is an important factor in choosing an index fund to invest in, because fees are deducted from your balance and thus reduced your rate of returns. The last reason to invest in the VFIAX is because the initial minimum investment is also low ($3,000).
So if you’re looking for an index fund that maintains low operating expenses while enjoying a good rate of return, the Vanguard S&P 500 Index Admiral is for you.
Vanguard Developed Market Stock Index Admiral
For diversification, you should consider in your investment portfolio some index funds that invests in foreign countries. International funds are diversified because they invest in countries around the world. If so, the Vanguard Developed Market Stock Index Admiral fund (VTMGX) is a fine choice.
This Vanguard index fund tracks the performance of the FTSE Developed All Cap ex US Index. It invests in large cap stocks in 24 developed countries. Some of its several blue-chip multinational companies include the Toyota Motor Corp (7203), Royal Dutch Shell (RDS.A.), Nestle SA (NESN), making it one of the best Vanguard index funds.
This index fund has a minimum investment of $3,000 and an expense ratio of 0.07%.
Vanguard Emerging Markets Stock Index Admiral
While Vanguard index funds invested in U.S. stocks tend to perform better than Vanguard index funds invested in emerging markets, emerging markets in Latin America, Asia, and Eastern Europe should not be overlooked.
If you don’t mind investing in emerging economies, consider checking out the Vanguard Emerging Markets Stock Index Admiral (VEMAX), which is currently one of the best Vanguard index funds to buy now.
In fact, some of the big name foreign companies included in this index fund are Alibaba Group Holding Ltd ADR (BABA), Tencent Holdings Ltd (TCEHY), Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), and China Construction Bank Corp Class H (00939).
This investment attempts to track the performance of the FTSE Emerging Markets All Cap China Inclusion Index.
One of the downside of this index fund is that it has an expense ratio of 0.14%, but it still has a low minimum initial investment of $3,000.
Vanguard Total Stock Market Index (VTSAX)
The Vanguard Total Stock Market Index (VTSAX) is one of the best Vanguard index funds. It captures the total market.
That means it gives investors broad exposure to the entire U.S. equity market including large cap, mid cap and small cap growth and value stocks.
Some of the big name companies included in this Vanguard fund are: Facebook, Alphabet, JPMorgan Chase, Apple, and Microsoft.
This Vanguard index fund has an expense ratio of 0.04% and a minimum initial investment of $3,000.
So, if you’re looking for a well diversified Vanguard fund and don’t mind a little volatility, this index fund is for you.
Note that you can purchase this index fund as an ETF as well. It start at the price of one share.
Vanguard Mid-Cap Index Admiral
The Vanguard Mid-Cap Index Admiral fund (VIMAX), which tracks the CRSP U.S. Midcap Index, may be appropriate for you if you have a long term perspective.
That is because the index fund, which consists of midsize and smaller stocks, performs better in the long term rather than the short term, making it one of the best Vanguard index funds to include in your investment portfolio.
The fund targets midsize companies. The minimum investment is $3,000 with an operating expense of 0.05%.
So if you’re looking for a Vanguard index fund to use for retirement investingand you don’t expect to tap into your investment money for 10 years or more, the Vanguard Mid-Cap Index Admiral fund is for you.
Vanguard Small-Cap Index Admiral
The Vanguard Small-Cap Index Admiral (VSMAX), as the name suggests invests in stocks of smaller companies.
This index fund tracks the CRSP U.S. Small Cap Index. Some of its holdings include DocuSign, Inc (DOCU), Leidos Holdings Inc (LDOS), Tyler Technologies, Inc (TDY), Equity Lifestyle Properties, Inc (ELS), etc…
This index fund, just like the Vanguard Mid-Cap Index Admiral fund, tends to perform better in the long term. Therefore, invest in this Vanguard fund if you don’t plan to use your money within the next five years.
So if you’re looking for a broadly diversified index of stocks of small U.S. companies, the Vanguard Small-Cap Index Admiral is a good choice. This index fund has a minimum initial investment of $3,000 and an expense ratio of 0.05%.
Vanguard Short-Term Corporate Index Admiral
If you want to invest in short term bonds to use your money in the next five years to buy a house, or if you plan to withdraw the money from your retirement account, then the Vanguard Short-Term Corporate Index Admiral fund (VSCSX) is for you.
This bond index fund tracks the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index.
While you shouldn’t expect a return of no more than 2 to 3% annually on this bond index fund, corporate bonds in general are safe, and this fund is pretty stable.
Because of this stability, this short-term bond index fund makes it an appropriate investment. The Vanguard Short-Term Corporate Index Admiral has an expense ratio of 0.07% expense and a minimum initial investment of $3000, making it one of the best Vanguard index funds around.
Vanguard High Dividend Yield ETF
The Vanguard High Dividend Yield ETF (VYM), as the name suggests, is a “dividend” fund. It attempts to track the performance of the FTSE High Dividend Yield Index.
This index ETF allows investors to earn dividend through growth companies. Some of the big companies with a strong record of paying dividends are AT&T, Intel, and Exxon Mobil.
As of 2/27/2020, this ETF has an expense ratio of 0.06%, making it one of the best Vanguard index funds for income. It starts at the price of one share.
So, if you’re looking for an index fund with the best long term investments growth potential, and you don’t mind the stock market volatility, this income-focused fund is appropriate for you.
Note that the Vanguard High Dividend Yield is also available as an Admiral share with a minimum investment of $3,000.
Vanguard Information Technology
Vanguard Information Technology Index Fund Admiral Shares (VITAX) is a sector fund. This investment attempts to track the performance of the MSCI US Investable Market/Information Technology 25/50.
Sector funds invest in stocks and/or bonds in specific industries. And the Vanguard Information Technology Index Fund, as the name suggests, focuses only on technology.
Generally, you should avoid sector funds mainly because they lack diversification. However, there is an exception with this Vanguard index fund. It focuses on technology, which makes it one of the best Vanguard funds.
In addition, this index is made up of stocks of large, mid-size, and small U.S. companies within the technology sector.
Nowadays, technology has shaped our daily lives. From computers, TVs, tablets, etc, everything is connected to the internet. Therefore, this means that there is and there will be continued growth in the years ahead.
The top companies included in this Vanguard fund are Apple, Microsoft, Visa, Adobe, PayPal, etc.
This index fund has an expense ratio of 0.10 %, but a minimum investment of $100,000. This can be high for the beginner investor.
However, this Vanguard index fund is available as an ETF, starting at the price of one share.
Vanguard Real Estate
The Vanguard Real Estate Index Fund Admiral Shares (VGSLX) is another sector fund. It focuses on real estate investment trusts (REITs), which are companies that buy office buildings, hotels and other real estate properties.
This Vanguard fund seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 index.
Just as any other sector funds, this Vanguard real estate index fund may lack diversification. So, it makes sense to have this index fund in conjunction with another a more broadly diversified Vanguard fund.
Despite the lack of diversification, however, this fund distributes higher dividend income than other funds, allowing it to be among the best Vanguard index funds for income.
This Vanguard fund has an expense ratio of 0.12%. It has a minimum initial investment of $3,000.
Note that this Vanguard fund is also available as an ETF, starting at the price of one share.
Final tips for buying the best Vanguard index funds
In general, index funds are a good investment vehicle to use. So whether you’re looking to invest money for retirement, or you’re looking to add diversification to your investment portfolio, these Vanguard index funds are a great choice for you. They are great quality funds. They produce superior returns comparing to other similar funds.
Indeed, the best Vanguard Index funds will not only save you money in fees throughout the years. But also, these low-cost index mutual funds and exchange-traded funds (ETFs) will give you a wide exposure to different asset classes.
Speak with the Right Financial Advisor
If you have questions beyond knowing which of the best Vanguard index funds to invest, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
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Financial advisors help you to plot a strategy to reach your lifeâs financial goals. This list of Boston advisors are willing to work with young professionals just starting a serious financial journey in the Cradle of Liberty.Financial advisors help you to plot a strategy to reach your lifeâs financial goals. This list of Boston advisors are willing to work with young professionals just starting a serious financial journey in the Cradle of Liberty.
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Understanding how much money you need to buy a house can give you an idea of how much you should expect to save.
You’re probably excited about the thought of buying your first home? If so, you have every right to be.
But how much money do you need to buy a house? A calculator can help you determine that. But the average cost of buying a $300,000 is typically around $17,000.
In this article, we’ll go over the main costs of buying a house including the down payment, inspection cost, appraisal cost, closing cost, etc.
Check Current Mortgage Rate
How much money do you need to buy a house?
Out of Pocket Cost of buying a house
The five main out of pocket costs of buying a house are 1) the down payment; 2) inspection cost; 3) the appraisal cost; 4) earnest money and 5) closing costs. These out of pocket costs or upfront costs are money yo need to pay before you become the owner of the property.
In addition, some lenders also require you have some cash reserves to cover 2 to 3 months of the mortgage repayments.
Determining how much cash needed to buy a house depends on the type of loan you’re using.
Let’s suppose you’re buying a $300,000 house with an FHA loan.
An FHA loan requires a 3.5% of the home purchase price as a down payment as long as you have a 580 credit score. So, for the down payment alone, you will need $10,500.
Here’s a quick breakdown for how much cash needed to buy a $300,000 house:
Down payment: $10,500
Inspection cost: $300
Appraisal cost: $300
Closing cost: $6000
So, $ 17,100 is how much money you need to buy a house.
Whether you’re buying a house with a 20% down payment or 3.5% down payment, you can certainly find a loan with both the price and features to suit your needs as a first time home buyer. You can compare First Time Home Buyer home loans on the LendingTree website.
The down payment
The biggest cost of buying a house is obviously your down payment. But that depends on the type of loan you are looking for.
For example, a conventional loan requires a 20% down payment. You can pay less than that, but you will have to pay for a private mortgage insurance – which covers the lender in case you default on your loan.
A 20% down payment however can also mean that you’ll get a better interest rate, which also means you’ll save money on interest.
For an FHA loan, you only need 3.5% down payment as long as your credit score is 580.
FHA loans are very popular these days. Not only it’s easier to get qualified (low down payment and low credit score), but also your down payment can come from a friend, a relative or your employer.
Using our example above, you only need $10,500 for a down payment for a $300,000 house.
If you’re using a VA loan then you pay $0 down payment.
Check to see if you’re eligible for an FHA loan or VA loan
How much money do you need to buy a house also depends on other factors, such as whether you are a first time home buyer or not. Your state may have a range of programs that may contribute toward your down payment.
So visit your local government office to find out if you are eligible for any down payment assistance for first time home buyers.
Inspection cost
Another upfront cost of buying a home is the inspection cost.
It is highly recommended to perform inspection for your home for any defects so there are no surprises later on.
Inspections typically cost between $300 to $500, but it depends on the property and your local rates.
Compare home loans for first time home buyers with LendingTree
Appraisal cost
Before a lender can give you a loan to finance a house, they will want to know how much the house is worth. So appraisal means an estimate of the home’s value. A home’s appraisal usually costs between $300 to $500. A home appraisal will also determine what your property tax will likely be.
If you’re pay the home appraisal, it will be deducted from the closing cost. (see below).
Earnest money
Earnest money is a deposit you will have to pay upfront as soon as an offer is accepted, while you working on other aspects such as getting the home inspected, etc…
This deposit is part of the down payment, and it is usually between 1% to 3% of the final sale price. It is held by an escrow firm or attorney until the closing process is completed.
So if the sale is successful, that money is applied to your down payment. If it’s not, you get 100% of your money back.
Closing costs
The closing costs are fees by the lenders. They typically cost 2% to 5% of the final price. The costs include fees for homeowner’s insurance, title insurance, title insurance, property tax, HOA dues, private mortgage insurance.
It’s possible to lower these costs by comparing mortgage options.
Other costs of buying a home:
In addition to upfront costs, there are other recurring costs associated with buying a home. They include moving fees, repair costs, furniture, remodeling, etc. So consider these costs when making your budget to buy a house.
So how much money do you need to buy a house? The answer is it depends on the type of loans you’ re using. But if you’re buying a $300,000 house with an FHA loan, which requires a 3.5% down payment, $ 17,100 is how much money you need.
For more information about upfront costs of buying a house, check out this guide.
Read more cost of buying a house:
How Much House Can I Afford?
How Long Does It Take to Buy a House?
Buying a House for the First Time? Avoid these Mistakes
5 Signs You’re Not Ready to Buy a House
Work with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). So, find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post How Much Money Do You Need to Buy a House? appeared first on GrowthRapidly.
If you lose your chase debit card by any chance or if it was stolen, you can request a replacement very easily. But one thing you cannot do anymore is to just go to a Chase branch in your neighborhood and request a replacement card. While it was convenient, Chase discontinued that method due to fraud. We’ll show you how you can replace your chase debit card in 3 other ways.
Note that if you card is about to expire, there is no need to request a replacement card. Chase will automatically send you a new card during the month your current card will expire. The main reasons to request a card are if your card has been stolen, lost, or damaged.
Three Simple and Easy Ways to Request a Chase Debit Card Replacement:
1. Do it online at Chase.com
The first way to request your Chase debit card replacement is to do it online.
1. Go to Chase.com to sign in. 2. Once you are on the homepage, click on the “More…” options. 3. Then, click on “Account Services.” 4. Then, click on “Replace a lost or damaged card.”
After you have completed all these steps, the new window will ask you to choose a Chase debit card that you need to replace. It also ask you to choose a reasons why you need to request a Chase debit card replacement.
The three main reasons you will notice on the drop down menu are: 1) my current cards needs to be re-issued; 2) My card is lost; 3) My card wasn’t received.
Once you have chosen a reason for replacement, review and submit your request. You should receive your card in 3-5 business days. If you don’t receive your card after five days, call Chase customer service using the number on your statement.
2. Replace your Chase Debit Card by calling customer service.
Another way to order a Chase debit card replacement is through telephone. Using the Chase customer service is available 24/7. So you can call immediately, especially if you think your debit card was stolen.
The telephone number to call is 1-800-935-9935. If your credit card that is lost, damaged or stolen, the right telephone number is 1-800-432-3117.
3. Replace your Chase debit card is through the Chase Mobile app.
Lastly, the third way to replace your Chase debit card is through the Chase Mobile app.
If you have installed it on your phone, this should be very easy and straightforward. Right from your phone, follow these steps:
1) After you login into your Chase Mobile app, tap on the debit card or credit card you want to replace. 2) Scroll down to find “Replace a lost or damage card.” 3) Then, choose the card you want to replace and then choose a reason for replacement. 4) Review your request and submit it.
Simple and done!
In conclusion, if you think you need a Chase replacement card, request it either from the Chase Mobile app, sign in to chase.com, or call the 800 number. It’s easy and you can request it in under 5 minutes. But one thing you cannot do is visiting your local branch and request one instantly. Chase will not replace your debit card at any of its locations. You’ll have to use the three methods outlined above.
Related:
CIT Bank Savings: How Much Can You Earn?
How Much Should You Save a Month?
What is a Consumer Loan
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