Q&A: VFIAX, Dividend Investing, and $200K in Savings
Nov 2, 2023
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The Rich Habits Podcast Q&A episode covers topics such as the differences between VOO and VFIAX, the workings of dividend ETFs, allocating $200K in savings, and starting 18-year-old kids off on the right track financially.
VFIAX and VOO are different investment options with varying minimum investment requirements, trading frequencies, and expense ratios.
Investing in Bitcoin through an IRA can provide diversification, but it is crucial to understand the risks and have a long-term perspective.
Deep dives
Difference between VOO and VFIAX
VOO is the ETF for the S&P 500, while VFIAX is the index fund for the same. VFIAX has a minimum investment requirement of $3,000, while VOO allows for as little as $10. VFIAX is traded once a day, while VOO is traded in real-time. The expense ratio for VFIAX is 0.04, while VOO has an expense ratio of 0.03.
Investing in Bitcoin through an IRA
Investing in Bitcoin through an IRA can be done and may provide a way to include cryptocurrency in a diversified portfolio. It is important to consider the ups and downs of Bitcoin, as well as having a long-term perspective and understanding the risks involved.
Utilizing zero interest credit cards
Zero interest credit cards can be used to consolidate and transfer high-interest debt from other cards, allowing for a period of time without interest charges. This allows individuals to have time to pay down their debt without the burden of high interest rates. It is important to be mindful of any balance transfer fees and pay attention to the terms and conditions of the credit card.
Allocating $200,000 in investments
When allocating $200,000 in investments, it is important to first pay off high-interest debt and establish a savings account with three to six months' worth of expenses. Afterward, considering maxing out a Roth IRA, investing in passive income ETFs, diversifying through cryptocurrency and real estate investments can be considered. Implementing dollar-cost averaging when investing can help mitigate market timing risk.
In this episode of the Q&A version of the Rich Habits Podcast, Robert Croak and Austin Hankwitz discuss the difference between VOO and VFIAX, how dividend ETFs actually work, allocating $200K in savings, as well as how to start your 18-year-old kids off on the right path financially.