Weather to add to IRA or purchase index fund

Investing
#1

Hey Jeremy, best of luck with this new platform to help the masses learn to generate wealth.

Currently have 2 Roth IRA’S with Janus Henderson (Janus Forty & Janus Research) had it for years and stopped contributing shortly after opening. Since Feb 2020 I’ve been putting in $200 a month and thinking of doing $200 per month in a index fund as well looking at (FNILX) your thoughts or should I go with a different Index like (VOOG). I have $500-$600 per month to invest the additional $100-$200 i’d be looking to purchase a couple stocks here and there. Should I just put the $200 in the IRA and make it $400 per month or go the Index route.

Also when purchasing a index fund should I be opening an account with the particular company or use my TD Ameritrade account.

Thanks for your contribution and information. Been following you since you were on EYL…Blessings…

#2

Hey @A.Grant813!

Thank you for the kind words!

First a point of clarification: You aren’t really choosing between an IRA or index funds. An IRA is a type of account. And index funds are something you put in your account.

So first, either way, I would suggest contributing to the IRA up to the max ($6,000/year) before you invest outside of it. That’s a tax break you won’t get anywhere else.

Then, your decision is INSIDE of that IRA, what do you invest in. It looks like you have a couple actively managed mutual funds whose expense ratios are both around 0.7%. Those are OK, but I think you would be much better off long term investing ALL of the money inside of your IRA (existing investments and future contributions) in low cost index funds. That might mean transferring your IRA to another brokerage like Vanguard, Fidelity, Schwab or Betterment.

I’m personally a fan of “target date index funds” which are an all-in-one low cost set it and forget it option which are pretty darn close to optimal investing with close to no work.

#3

Thanks for the information. Will I pay fees or tax for moving my IRA? I saw in one of your previous posts to invest in multiple areas of the index funds. So I’ll look into doing that. :pray:t5: