Author Topic: GF using ACORNS instead of Vanguard, problem?  (Read 1521 times)

BuckeyeFinance

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GF using ACORNS instead of Vanguard, problem?
« on: November 02, 2018, 09:21:03 AM »
I've always used Vanguard for my non-tax sheltered investments (100% low fee index funds) simply because it is the most recommended. My girlfriend uses ACORNS but I'm not able to provide any actual reason she should switch? Is there a reason for her to switch?

I'm a red panda

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #1 on: November 02, 2018, 09:43:07 AM »
What are the expense ratios? How much is she paying?

DS

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #2 on: November 02, 2018, 11:26:27 AM »
Well, would she actually take the money and transfer it herself into Vanguard or is she finding the automatic rounding up helpful?

Acorns is a good place to get started if you aren't ready to take it to the next level. In the end though, it's driven by spending so might want to take a deeper look at finances to determine how much can be saved each month without the rounding feature.

magnet18

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #3 on: November 02, 2018, 11:58:34 AM »
Check the expense ratios/fees

Also, if just for the rounding up, assume $.99 per purchase.
Assume 1 purchases per day (about what I do many on here are far lower)

So you're saving what, $30/month?

Better than nothing, a good first step, but a drop in the bucket compared to the thousands/month you should be saving for FI

remizidae

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #4 on: November 02, 2018, 05:42:32 PM »
The first question you should ask yourself is, "Did she explicitly ask for my advice?"

If no, STFU.

MOD EDIT: No need to be rude.
« Last Edit: November 06, 2018, 05:22:58 PM by arebelspy »

Tester

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #5 on: November 03, 2018, 09:35:45 AM »
My 401k is at vanguard.
Niw I also have individual at Vanguard as I had a bigger amount.
I am also putting 80 usd/month in Robinhood and buying individual stocks.
Good news, Robinhood now also has some Vanguard things like VTV.
One year when I had extra money I put more in Robinhood but did not buy individual stocks, bought VTV.
I like Robinhood brcause it has no fees for transactions and I can afford that 80usd/month play.

MrSal

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #6 on: November 03, 2018, 10:24:39 AM »
I like the concept of the rounding feature - my bank in Europe used to do this on their debit cards and credit cards if you activated the feature... this in 2002 !! ...

Is there any bank that does this on a checking account? I want to have the money freely available on a savings or something and then direct it where I want it to. I don't want to have my main checking on Acorn or something like that... are there alternatives/better ones?

Thanks.

Proud Foot

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #7 on: November 06, 2018, 02:03:28 PM »
If it makes it easier for her to save there isn't much of an argument against it. Here is the ETF list they use, all Vanguard except for the two bond ETF's. The monthly fee structure is straight forward and easy to understand. Potentially a high ER depending on your balance. The set up works a lot better for someone who has a high number of card transactions per month to quickly build the balance and bring down the ER.

I like the concept of the rounding feature - my bank in Europe used to do this on their debit cards and credit cards if you activated the feature... this in 2002 !!
Is there any bank that does this on a checking account? I want to have the money freely available on a savings or something and then direct it where I want it to. I don't want to have my main checking on Acorn or something like that... are there alternatives/better ones?

Thanks.

You might check out a local credit union. I know of a few in my area that offer this feature.

BuckeyeFinance

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #8 on: November 09, 2018, 01:40:18 PM »
OKAY so she is on board with switching to Vanguard for lower expense ratios, more investment options, and consolidation of our investments.

The question is: Can we transfer her money to Vanguard (VTSAX) without creating a taxable event?

Aunt Petunia

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #9 on: November 09, 2018, 01:56:48 PM »
OKAY so she is on board with switching to Vanguard for lower expense ratios, more investment options, and consolidation of our investments.

The question is: Can we transfer her money to Vanguard (VTSAX) without creating a taxable event?

See if she can transfer the ETFs "in kind". Then she isn't selling them, just moving them to a different account.           Once they are in Vanguard you can see what the expense
 ratios actually are and decide if it is worth selling. This would depend on her marginal tax rate and how long she has owned the shares.

BuckeyeFinance

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #10 on: November 09, 2018, 02:08:08 PM »
OKAY so she is on board with switching to Vanguard for lower expense ratios, more investment options, and consolidation of our investments.

The question is: Can we transfer her money to Vanguard (VTSAX) without creating a taxable event?

See if she can transfer the ETFs "in kind". Then she isn't selling them, just moving them to a different account.           Once they are in Vanguard you can see what the expense
 ratios actually are and decide if it is worth selling. This would depend on her marginal tax rate and how long she has owned the shares.

What would actually constitute selling? Marginal tax rate is high and investments held for < 1 year.

BrightFIRE

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Re: GF using ACORNS instead of Vanguard, problem?
« Reply #11 on: November 09, 2018, 02:43:11 PM »
What would actually constitute selling? Marginal tax rate is high and investments held for < 1 year.

Selling is literally selling the investments, which means taxes on the sale and cash returned to you. Transferring means you're just moving your investments from 1 broker to another - no sale, so no taxes.