I just opened my Roth IRA, and contributed the full $6k for 2020, and another $6k for 2021. I sure do have enough to invest in the Vanguard 500 mutual fund, but what if I was doing month to month ($500) and just started my account? Would I have to wait till I reach the minimum contribution? Also, some mutual funds have a minimum of $5m to invest. I’m new to this, and it got me confused whether I was investing in the right funds.
You can invest in VOO which is the ETF version of the S&P 500 at Vanguard and there’s no minimum and practically no difference. Once you hit the $3000 you can exchange you funds for VFIAX which is the admiral mutual fund with the $3k minimum.
What is the benefit of trading your ETFs for the admiral mutual fund?
I honestly think it’s negligible but usually comes down to any applicable fee and ETFs trade throughout the day while mutual funds trade at end of day. I’m not the most attune to the most critical differences so would ask around or see if anyone else chimes in here.