Buying the market

With my Vanguard Roth IRA on cruise control, I didn't even notice the weekly $107.40 missing from my checking account. I was a contractor being paid weekly at the time, so I setup the automatic investment to come out the same day I was paid. Again, this was optimal since I never had the money, prime example of paying yourself first.

By this time, late November 2007, I had a few thousand dollars in my Bank of America low interest savings account and had been reading everything I could about investing. Everywhere I saw the S&P 500 mentioned and this regularly being used as a benchmark for all other investments. Having been pleased with Vanguard up until this time, I discovered the Vanguard S&P 500 Index mutual fund (VFINX) which had a minimum initial deposit of $3000. At the time I had repeatedly read that a lump some of money invested at anytime in the market would, over the long run, outperform bonds or savings accounts.

Eagerly I created an individual taxable account with Vanguard and purchased $4000 of VFINX. I again setup an automatic payment plan to pull another $100 on a weekly basis and contribute to this fund. I was well on my way to investing instead of saving.