T Rowe Price started in 1937 with the mindset of charging clients’ fees based on assets rather than commission. During their 87 years in business, they currently manage $1.63 trillion in assets. Mutual fund account holders pay an annual fee of $20 if your account is less than $10,000 while also paying an expense ratio depending on what fund you invest in.
Vanguard has been in business since 1995 offering a reputable place to invest comfortably. They have a $25 account service fee when opening an account. They have fees when buying and selling shares to discourage short term transitions. They never charge front-end or back-end loads. Meaning they do not have a sales fee when buying a share. This can generally be as high as 8.5%.
Investing in either company would be a safe choice for long term success with minimal cost. Below will be actual screenshots of how to DIY invest in mutual funds on these companies’ websites.
Opening a Roth IRA
Above is the main page in opening a Roth IRA with T Rowe Price. Roth IRAs: Explore Your Roth IRA Options | T. Rowe Price A Roth IRA is a personal retirement account that you can open if you earn money.
Above is the information you will need in opening a Roth IRA with T Rowe Price.
Picking a Mutual Fund
Above is a mutual fund that T Rowe Price offers. The above fund is Communication and Technology fund. The second column is the Morningstar rating which can give you a general idea of the reliability of the fund. Note that it also has the amount of companies in the mutual fund. Communication and Tech has 43 other companies within this fund. By clicking on the fund, you can see what companies are in it. The third column is a risk potential. T Rowe will let you know how risky each fund is based on what the fund is invested in. The younger you are, the riskier the fund you could invest in. Then look at the return percentage “Since Inception”. This means from when the fund started which in this case was 1993 or 27 years ago. The rate of return is 14% which would turn $100 in 1993 into $4,300 in 2024 if you didn’t invest anything. Lastly, it’s important to look at the last column which is the expense ratio. The expense ratio is an annualized operating cost of a mutual fund divided by the average dollar value of the fund’s average net assets. The lower the ratio, the lesser it costs.
Above is a similar Mutual Fund list for Vanguard. Above is the Growth and Income fund that has an expense ratio of .35% and is risky. The return since inception or 1986 is 10%. You have to have at least $3,000 invested to start and the cost per share is $70 currently. All of these are things to consider when choosing a mutual fund.
Final Thoughts
- Invest in something you believe in
- Understand your risk (Younger = More Risky)
- Return Since Inception 10% or higher and older the better
- Expense Ration
- Long Term Mindset