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[quote=Anonymous][quote=Anonymous]OP here. You have been very helpful. I think a Vanguard life cycle is the way to go. I understand the automatic allocation shift, and I had never seen something like that before. One thing I'm not understanding though- once the money is there, how do I know what I'm investing in? What stocks? I am trying to figure this out on the website but maybe it's too simple of a question?
Am I just trusting Vanguard to invest in certain stocks?
I am also having a hard time understanding what's more important - establishing an EF or starting an IRA asap. The smart thing would be to establish my EF, but I'm also antsy since I have zero retirement. Can I focus my main savings on EF and put small amounts into my IRA?  Even if it's not adding up to much, it would give me a piece of mind. [/quote]

OP, if you are investing in Vanguard Target Retirement 2040 Fund (which I would recommend at your age), your investments will be allocated into 3 core mutual funds:
-63% Vanguard Total Stock Market Index Fund (U.S. stock market)
-27% Vanguard Total International Stock Index 
-10% Vanguard Total Bond Market II Index Fund

This is an aggressive allocation - 90% stocks - because you are young and have time. As you get older, it will become more conservative. For example in 20 years the fund will likely invest around 30% in bonds. Investing in both the U.S. and international provides diversification. I'm sure you know this, but it's key once you start investing to leave this fund alone - don't panic if it drops in value. You should make it up over time.

You need $1,000 to invest initially. I believe you can then automatically invest as little as $50/month.

Hope that helps! You are smart to do this now!
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