Hi OP,
Vanguard is the way to go, but just a couple of mutual funds. No need to have more than 3-4. Do one small cap, one large cap, one international, one real estate or something like that. Allocate and then leave it alone. If you don't need the $600 (I mean NEED, not want), just leave it. The point, at your age, is to gain all that time and compounding. You will be so glad you did this much later in life, believe me.

www.bogleheads.org

Go to this website and pose your question there.

OP, are you asking a more basic question about whether removing your gains decreases the amount you make on the investment in the future? If so, the answer is certainly yes. If you leave your gains in the account to earn additional interest, you will make massively more money over the long run then if you remove the gains immediately.

Anonymous wrote:I don't understand why you would do this unless you had an emergency and absolutely needed the cash. For low expense ratio mutual funds/index funds, you tend to make the most if you hold onto it for multiple years (you've made $600 now--what about in 5-10 years?), and, as PP mentioned, you pay taxes on long-term capital gains rather than short term capital gains. I have a small stock portfolio that is made up of largely index funds and ETFs which has been slowly growing over the years, and I only intend to sell stock for a major expense like a downpayment for a house or some sort of catastrophic medical emergency.

You pay more tax on ST cap gains.

I don't understand why you would do this unless you had an emergency and absolutely needed the cash. For low expense ratio mutual funds/index funds, you tend to make the most if you hold onto it for multiple years (you've made $600 now--what about in 5-10 years?), and, as PP mentioned, you pay taxes on long-term capital gains rather than short term capital gains. I have a small stock portfolio that is made up of largely index funds and ETFs which has been slowly growing over the years, and I only intend to sell stock for a major expense like a downpayment for a house or some sort of catastrophic medical emergency.

There is a short term and a long term capital gains rate. Sounds like you'd be taxed short term if you haven't held investments for more than 12 months; short term cap gains is the same as your ordinary income tax rate. Long term rate is lower, which is why it's beneficial not to buy and sell stocks/mutual funds all the time (though people do if they want to be trading actively).

Thanks, PP. Yes it's mutual funds so I meant selling. So how do I know what the taxes will be?

When you say "best performing Vanguard accounts" - does that mean mutual funds or something else? If it's mutual funds and you're "taking out" -- i.e. selling, you need to realize that you will pay capital gains tax on that. So if you made $600, it's not like you sell and get to keep $600; depending on your tax rate, you'll get to keep a bit more than half so then you have to consider whether it's worth selling for $300-400 or letting the investment continue to grow and sell when you've made 1k, 2k, whatever the goal might be.

I need help understanding investments.

I recently set up an aggressive brokerage account with extra savings (~$25k). I have little idea how these work but I researched the best performing Vanguard accounts.

Even though there's no penalty, does it put me at a disadvantage to take out, say, $600, if I earned $600 that day? Or is that utilizing my earnings and then building again on my base?