How to Avoid a Mutual Fund’s Minimum Investment

Here's a tip I picked up from Matt Krantz of USA Today. Most mutual funds require a minimum initial investment. Even most Vanguard funds have a $3,000 minimum. When I started investing a long time ago, you could bypass the minimum investment requirement by agreeing to an automatic investment plan. Today, this option is often not available. So if you want to invest in a fund, but don't have enough money to meet the initial investment requirement, turn to an online discount broker instead.

With discount brokers such as Zecco, TradeKing, or ShareBuilder, you can invest in an Exchange Traded Fund (ETF) for about $5 a trade. For example, rather than buying Vanguard's S&P 500 fund (VFINX), an investor could purchase shares of Vanguard's Large Cap ETF (VV). And while you do have to pay a few dollars for each trade, the cost is no more than an expensive cup of coffee at Starbucks, and the expense ratios of ETFs are generally lower than the cost of the mutual fund counterparts.

This past week has seen a number of great blog carnivals and articles. Here are several worth reading:

Articles

• Don’t ask “if” … ask “how”! (@7 Million in 7 Years)
• How to Spend Like a Frugal Millionaire (@Alpha Consumer)
• Shadox: One; Citibank: Idiots (@Money and Such)
• Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD) (@Bible Money Matters)
• 10 Movies That Can Teach You About Money (@Mint)
• The Barter Economy: 14 Great Places to Trade Stuff Online (@The Simple Dollar)
• 23 ways for teens to make money (@Christian PF)
• 72 Stunning Business Cards That Will Blow You Away (@Freelance Switch)
• Small Change - Getting the Best Home Appraisal (@Small Change)

Carnivals

• Money Hacks Carnival #66 - The Family Summer Vacation Edition (@Passive Family Income)
• Carnival of Wealth, Money and Life - May 30, 2009 (@Dollar Frugal)
• Carnival of Personal Finance # 206: The Memorial Day Stars and Stripes Edition (@Greener Pastures)
• Economy and Your Finances Carnival 24 May 2009 (@OneMint)
• Wealth, Money and Life Carnival - May 23, 2009 (@Dividends Value)