S&P 500 vs vanguard funds

[Frugal_Technician]

Main question in title but some extra details
Im a young guy (24) and I work as an apprentice heating technician (made the list of MMMs 5@ jobs!) i can afford to save around 20k a year between me and my SO.

Should I be investing in the s&p 500 thru fidelity (I think this is an optio ), or should I be putting my savings in a vanguard managed fund? S&p seems like it has higher returns by a slight margin but is also more volatile.

I have no debts, great credit, and more or less sustainable income. My prospects for income increase down the line are also high. I feel I have some good chips lined up to retire in my 40s. Looking for experienced advise about the best place to put my money.

My company doesn't have a 401k or retirement plan AFAIK. I don't really understand the ins and outs of all that but I need a place to put my money where it will grow. I have a fidelity and a vanguard.

[PlainsWalker]

Welcome to the forums.

I'd start with giving the stock series over at jlcollinsnh.com a read. You're asking the right questions and Jims' folksy wisdom should get you going in the general direction you would like to go.

[Proud Foot]

What Vanguard managed fund are you talking about?  They have several who have done well along with most index funds. Read the stock series PlainsWalker posted as well as creating an Investment Policy Statement .  A lot of people here advocate for Vanguard because of their low expense ratios and how the company is structured. 

[bacchi]

Fidelity has a total market index fund, FSTMX. Its expenses are crazy low like Vanguard's VTSMX.

You can almost certainly open and fund a traditional IRA at Fidelity (or Vanguard). That'll give you some tax-advantaged room.

[Frugal_Technician]

I've read thru a lot of jlcollins stuff which led me to this question. I do have a Roth IRA as well but I don't really understand it as far as taxes go (on my research to do list)

Glad I'm thinking in the right direction. MMM has opened my eyes the the possibilities 20 years fe now when I'll be the age of the average person mid career

[ZiziPB]

I think the first order of business for you is to educate yourself on retirement saving vehicles (traditional IRA, Roth IRA, 401k, etc.) versus investing in a taxable account.  Once you decide what vehicle(s) to use, then you can decide on specific asset allocation and what specific funds to use.

[caracarn]

I've read thru a lot of jlcollins stuff which led me to this question. I do have a Roth IRA as well but I don't really understand it as far as taxes go (on my research to do list)

Glad I'm thinking in the right direction. MMM has opened my eyes the the possibilities 20 years fe now when I'll be the age of the average person mid career

Generally my view on the Roth is that if you feel your tax bracket will be lower now then when you retire, it makes sense if it is the opposite, then traditional IRA is just fine.  There are some benefits for withdrawing before traditional retirement age with Roth and if you are planning for that then this might be helpful or you would be looking at the Roth conversion that is talked about on some threads here.

[chasesfish]

I've read thru a lot of jlcollins stuff which led me to this question. I do have a Roth IRA as well but I don't really understand it as far as taxes go (on my research to do list)

Glad I'm thinking in the right direction. MMM has opened my eyes the the possibilities 20 years fe now when I'll be the age of the average person mid career

If you already have a Fidelity account, the absolute lowest cost way to buy small quantities of the index is to buy IVV or ITOT through their brokerage account.  They are commission free at purchase and carry an option of being charged 0.01 to 0.03 per share when you sell.   Expense ratios are in-line with VTI or VOO, which are the Vanguard equivalent funds.

I just did this and ran the break-even, if you're buying in quantities of more than $20,000, its more cost effective to buy VTI or VOO directly.  When I say more cost effective, we're talking the difference of a one-time cost of $6 on $30,000.