I’ve been toying with the idea of buying a couple mutual funds for awhile. I hadn’t acted on the impulse for a few reasons – risk and retirement. The risk factor will always be there, but I think mutual funds are a safer bet than individual stocks anyday. I suppose I’ve become a little more tolerant for risk, so I’m pretty much ok there.

The other hurdle was retirment. I don’t currently max out my Roth IRA ( and I haven’t even opened one for my wife yet ). I don’t want to jeopardize my retirement by investing in other areas. However, I would like to earn some extra money in the short to mid term. As long as I hold the investments for over a year, I only pay long-term capital gains taxes of 15% on the earnings – I can deal with that.

The Numbers

So on to the good stuff. I chose to go with USAA instead of Vanguard, for two reasons. One, I’m already a USAA member, and have my Roth IRA with them – that makes it easy. Two, the barrier for entry is low. $50 per month auto-deposit gets you in. I went ahead and set up a $50 per month auto-withdrawal from my checking account for two funds. Once that was set up ( 2 minutes ), I deposited an additional $1000 in each fund to get them started. That little dance got me around the $3000 minimum opening deposit for each fund.

Which funds did I choose?

I chose USAA S&P 500 Index Member (USSPX) and USAA Precious Metals and Minerals (USAGX). Why? Well, both funds have shown solid gains over the last few years. The precious metals fund in particular has done well. I own this fund in my Roth IRA and it’s performed spectacularly for me. Granted, I know that past performance is no guarantee of future gains, but I thought these were good choices. For any concerns about my motives, please read my disclaimer.

Down the road

I’ll be tracking these investments in my monthly Net Worth recap. I’m hoping to see some solid gains, so that I will lose some of my fear of risk, and begin to invest more. Worst case scenario is that I’ll lose two grand. That certainly would tick me off, as well as turn me off from investments. But no one ever gets rich from sitting still, right? Taking risks is a good thing, and something most of us need to do a little more.