 $1,000 What's up money geeks mr. V here welcome to another video guys so into this video We're gonna be looking at how to invest your first $1,000 with Vanguard So I did a video in the past showing you how to open a vanguard account and fund the account So I'm gonna hook that video up here so you can definitely go check it out And then most recently I've done another video really explaining to you why we decided to use vanguard for a brokerage account Again, I'm gonna hook the video up here so you can go check it out So if you've been following the channel like I talked a lot about investing for your future So if you are looking at taking that next step, let's say 2020 objective is to start investing And you have $1,000 to start I'm gonna show you where to go and where I would put $1,000 I'll show you funds or the ETFs that we're gonna buy and then I'll tell you why we're buying the ETFs Supposed to index funds at this particular time. So let's jump into it and kind of take a look come on So here we go guys once you go to vanguard.com you go to investing Investment products and then ETFs until you can choose your vanguard ETFs from here and the reason why I say you should choose vanguard ETFs is because when you trade vanguard ETFs on the platform is totally free I know vanguard just came out lately with the news that Trading on your platform is gonna be commission free moving forward. So if you want to trade any other ETFs, it might be free. I haven't I haven't tested that. So I'll probably try that In a year week or so, but vanguard offers a bunch of ETFs group into sectors like let's say technology consumer goods energy Real estate on every area that you can think of they have an ETF that represent that particular area say health care Just name it And so if you come in here what vanguard has actually done for people that are just starting out like yourself You want to invest your first $1,000? They've they have a list of ETFs here that you can you can choose from and this this for ETFs ETFs here are designed to give you Kind of a balanced portfolio But for you studying out you don't have to go buy all fall because you only have a thousand dollars, right? So you can start with one in most cases as you're studying out Based on your age if you are really young, let's say in your 20s or maybe your 30s and you plan to retire in 30 or 35 or 40 years and then you can know buy Mostly stocks and not worry about the bonds, but if you are in your say Late 40s 50s and you you're looking at hey, I want to retire in the next five or ten years You can start balancing your portfolio and put it into a bond in there so that That way you're not super exposed in case there's a crash in the market. So So these are VTI is a really good ETF and in tour for people that are just studying out This is one of one of my my my favorite each ETFs So I'm going to show you what that ETF looks like. So this is it right here And so if you look at it key things to Look at when you buy an ETF number one is that expense ratio is really low So it costs really really Just a tiny fee to maintain that particularly ETF. So you're not getting charged some crazy amount of money to maintain the ETF and then If you come down here if you look at this is the the performance of that ETF over Ten years. So since inception this ETF has been performing at about seven point six percent Annually average so the averaging that across The ten years that it's being in existence. So but you see here This one has been existing since 2001 and the average is seven point six percent. So that's not bad. So Hypothetically if you had invested $10,000 in this particularly ETF in let's say 2009 What you would have is about $35,000 right now in your account if you invest in just ten thousand dollars. So think about For the amount of work that you're doing which is pretty much nothing All you do is just buy it and just let it sit Two things are happening This ETF is paying you dividends And again, it's actually growing. It's you know, the price keeps going up And so that's how you can make that money. So this is one of my my favorites So if we go down here, this is the sectors that are in the ETF So it covers pretty much everything across the board utility telecom and technology Consumer goods, this is really good. So you're not I mean, it's not like you're just exposed to one sector Let's say if you just doing just oil and gas in this whole thing with Iran went down The price of oil and gas would probably just go down and your ETF will crash like crazy But see if oil and gas is going down, you have technology You have consumer goods that are gonna hold you afloat and these are the top ten stocks Or holdings in that particularly ETF. So Most of the technology I see some banking in there and stuff like that. So this is this is really good So, um VTI is a really good one to start with and then if you want to see Let's just say the price performance You can open this tap here and it would show you how the price has been doing. So this is the 52 week high 166 and 52 week low is 132 so This is ideally, this is a really good place to buy if you can if you can get in at that point But anyways, the most important thing is just to keep Buying and adding money to it. So that is it. And then if you go on the fees So again, like I said, there are the expense ratio here is only 0.03% so if you look about it here, so this is this is what All the ETFs will charge you over 10 years And vanguards are going to charge you 71 Dollars over a 10-year period if you invested $10,000 so compare. So this is how much you're saving $2,000 just by buying these ETFs. So ETFs are really really low-cost And you just buy it and just live it there. So that is one of my favorite VTI So the next one that I like to is I'm show you guys this one is The OO the OO is another one that it's really really awesome these guy tracks their It so this one has like it the 500 largest companies in in the US That's what it tracks so if you see it here representing 500 of the largest US companies and so It's a little bit prices were 301 at the time we were making this video And then we can look at it again. This is over 10-year period, you know, look at this is a rate of return since inception the rate of return is about 14.76 Adminus is ridiculous. This is awesome. So if you invested $10,000 in 2009 You are gonna be or 2010 and think yep, but in 2010, you're gonna be sitting at about $35,000 right now. This is great guys So if you buy the VOO or you buy VTI, you cannot go wrong. You'd be just fine and then So those are those are my two favorite to get to get you started You can't go wrong with either one of those and again, like I said, this is just Stocked Mostly there's no bonds or anything and since you're just starting out and you want to give yourself time to get in they get your hands wet And then so if you look at the fee here again, look at the expense ratio is 0.03 This is pretty good. Again, you're saving that same amount of money that we just talked about with VTI And both of these ETFs are owned by Vanguard. So which is awesome. Look at the distribution. So they're paying are Look at this is the amount of paper share No dividends per share 1.4 dollars 1.4 1.3 and so if you own three shares of this particular ETF what's gonna happen is every quarter you get, you know 1.4 times 3 and that's how much you get paid and then you reinvest that dividends back into your Stock and then next time when they pay dividends that amount go up higher. So that's called compounding So now that you know exactly this And you probably asking yourself like hey, why can't I buy an index fund? Great question. So let me show you why you cannot buy an index fund right now because you only have a thousand dollars So let's let's take it in the front here one of my good index funds that I love and have in my portfolio is VTSAX so if you have any idea about the fire movement People in the fire movement. That's financial independence retired early VTSAX is like that's the go-to index fund that everybody buys and For obvious reason, I mean, yeah expense ratio is really low zero point zero four But here is why you cannot buy an index fund. Look at this. It says minimum investment Is three thousand so just to start investing in this particular index fund You need three thousand dollars, but guess what you only have a thousand dollars So you start with ETFs and then once you get to the point where you have enough money And then you can you should start buying some some some index funds and again The whole thing here is the expense ratio is a really cheap You don't you don't spend a ton of money return. It's about seven point one over Sees inception over a ten-year period. So if you invested $10,000 in 2009 in this particular index fund, you have about thirty five thousand dollars right now Which is good and the difference is like the market would go up and down up and down up and down But we average it out See you are coming on you coming out on top, which is awesome. And then so these are the different Compositions so this particular VTS a X. This is the equivalent of I Think the equivalent of VTI So VTI is the index fund Sorry VTI is the ETF and then VTS a X is the index fund. So if you want to buy the index fund, this is what you get But since we're not there yet, we don't have the money. So we're gonna buy Just their ETF in this case so once you once you feel comfortable and that's what you hit buy and then that's gonna bring you to Your login page. So let's say we want to buy. So let's go here. We'll hit buy and Then that's gonna bring us your login page and that's what we're gonna log in into the account So let's get in there So once you log in Again, you want to trade ETFs or stocks. So let's say we select ETFs or stocks. So you select the account that you want to use I have multiple accounts in there and then you select the transaction tab You want to buy and then in your case you can either buy Either VTI You can't go wrong with either VTI or VOO so if you select VTI and then You want to enter the amount of shares since if you don't know you only have a thousand dollars and You want to know how much so use your calculator So if you have a thousand dollars to invest so say put a thousand dollars and then calculate So you're gonna get five about five shares of VTI and then you say use For trade and it's gonna populate that for you on a selector the order type in your case Since you're buying it right now, you do market and so just to give you what's happening So say keep in mind that market orders usually execute immediately, which is good So you're gonna buy it right now at the price that's currently trading as I was making this video at a hundred and sixty six And seventy two cents. So that's the price that's actually trading at so you select that and then you just click continue You're gonna you're gonna choose where the funds are gonna come from So if you have Maybe a money market account that your money's gonna come from and then you just you continue It's gonna be okay. Okay. Okay, and that's it and you have invested your first $1,000 and so in your case you have five stocks of five shares of VTI in your You know in your account in your investment account and then in the future if you just keep adding it so you can say oh You have you're bringing in two hundred dollars every month. You just automate the process It's gonna bring that money in and invest it and just keep buying Maybe you're buying, you know one one share or two shares every month and just keep adding it and the beauty about that is You you buying adding Compounding your dividends and everything that comes with it. You're gonna make a Really good amount of money in the future. So Yeah, this is it. This is you investing your first $1,000 and again guys, like I said, you can only invest in ETFs or you can invest in Individual stocks, but it takes a lot of risk to invest in individual stocks And also it takes a lot of research to invest in individual stocks So ETFs are the way to go with just 1000 and then when you make enough money You get up to the point where you have three four five thousand dollars in your account that you can move your portfolio Maybe buy some some some index funds and then some ETFs and just balance it that way And the difference with this that you notice is that index funds just trade They treat at the end of the day why ETFs treat at the time that you place the trade so they treat like stocks ETFs trade like you buy an individual stock. That's how ETFs trade index fund At the end of the the close of the market the price of that time. That's what The index fund is gonna trade that so just some things for you to consider So this is it. So now you have five shares of VTI in your brokerage account and you can just keep adding for today you go guys as you can see It's very easy for you to start investing Most people get scared when it comes to investing but without technology and with how easy Information is available to us today. You can definitely start your investment journey The goal about investing is not to start big as to start gradually start with a hundred dollars two hundred dollars three hundred dollars And start growing from there like today. I'm just showing you guys how we We did a thousand dollars. So if you don't have a thousand dollars, you have five hundred you can still get started The mistake most people always make is Hoping to start making a ton of money before they can start investing Which is the really wrong approach if you can start investing ten dollars a day now As you start making more money, you can increase that number to say 20 30 40 depending on how you're comfortable Get started. That's the most important thing. So question of the day What are some of the challenges that you've had in your investment path? Let me know in the comment section if you like the video go ahead and give it a thumbs up If you find it useful share one friend because that's how we get you know people to kind of learn about some of the stuff That we've learned I'm just sharing what I've learned over the years So if you can share it with somebody that will benefit from it Definitely go for it and as always stay motivated