Author Topic: Vanguard, a god?  (Read 9425 times)

heybro

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Vanguard, a god?
« on: October 05, 2014, 10:50:17 PM »
I hear a lot of talk about Vanguard (and their Total Stock Index Fund).  Is Vanguard the bee's knees?  What about Fidelity?

MikeBear

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Re: Vanguard, a god?
« Reply #1 on: October 06, 2014, 12:03:28 AM »
Vanguard was started by John Bogle. John Bogle (have you heard the term "Boglehead"? That's where it comes from) was the person that created the first index fund back in the mid '70's. He did this for the "little guy".

The biggest deal with Vanguard, is that the funds themselves OWN the company, and by us owning the funds, the investors themselves own Vanguard collectively. That helps keep them humble, and working for US. Also, most of the Vanguard funds tend to have the lowest fee's overall between all the companies out there, and that's good for a persons bottom line.

My company 401k (which will be maxed out (my contributions) at $23k this year) is with T. Rowe Price, but I have a Roth IRA through Vanguard. T. Rowe Price is ok, but they don't have the variety of choices out there that Vanguard does. Or at least if they do, they aren't available to me through my companies 401k.

The basics as I take it, is to invest first in a good S&P 500 fund with the lowest fees that's easily available to you. Then, go from there.

pmm

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Re: Vanguard, a god?
« Reply #2 on: October 06, 2014, 12:38:46 AM »
in terms of the funds, there's very little difference. the costs are virtually identical. you can get .05% on the total market index fund, so i see no reason to complain.
i personally use fidelity and love them. the customer service is excellent, you can set up a checking account with them that refunds all ATM fees anywhere (excellent, since i'm an expat), and credit cards with 2% cash back.

RapmasterD

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Re: Vanguard, a god?
« Reply #3 on: October 06, 2014, 02:47:29 AM »
Look at the costs. Fidelity has gotten much more competitive over the years for their passive funds. Most of our money is with Vanguard but I have a Roth IRA with Fidelity and have seen no need to yank it out.

5oclockshadow

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Re: Vanguard, a god?
« Reply #4 on: October 06, 2014, 09:27:55 AM »
Mr B and Mr J both start similar service industry companies, but they do so under dramatically different business models.  Mr B's is designed to make his customers owners.  Mr J's is designed to maximize profits for his family.  Decades later, Mr J has a net worth of 300 times that of Mr B, despite the fact that Mr B has build the larger company as more and more people realize that he saves them money.

Substitute Jack Bogle (Vanguard, personal net worth around $30 million) and Ed Johnson (Fidelity, personal net worth over $9 billion) for Mr B and Mr J, and you'll see the reason many of us favor Vanguard. 

Having said that, since Vanguard moved past Fidelity in assets under management several years ago, Fidelity has dropped many of its fees dramatically, making some funds roughly equivalent to Vanguard.  Even if you go with Fidelity though, realize that if you invest $17,500/year in a retirement account for 25 years, Jack Bogle will have saved you over $500,000 (versus what you would have paid 20 years ago when total fees were over 1% higher) by forcing every mutual fund company's expenses lower to compete with Vanguard.  I think that deserves at least a Christmas card.


Christopher.Pfohl

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Re: Vanguard, a god?
« Reply #5 on: October 06, 2014, 09:31:47 AM »
Note that Vanguard's customer service is amazing. When I realize I need help with my account I *never* dread calling their number, because I know two important facts: 1. Shortly I will be speaking with a human being. And 2. That human being will be competent to solve my problem, and if they, by some chance, are not able to solve my problem they will talk to their boss and then *the same person* will come back and help my resolve my issue, no repeating your story 15 times as you climb the management chain.

trailrated

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Re: Vanguard, a god?
« Reply #6 on: October 06, 2014, 09:44:14 AM »
So I attempted to open a Vanguard account over the weekend (after maxing retirement accounts) and was told that I could not sign up online and I would have to mail in the forms along with my banking statement to get started. I just got confirmation from the mail carrier that they received my paperwork about 3 and a half hours ago. How long is the process for my account to be funded and up and running?

-Someone that is impatient

Mother Fussbudget

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Re: Vanguard, a god?
« Reply #7 on: October 06, 2014, 09:55:45 AM »
The BIG advantage to having a Vanguard account?  Trade any Vanguard fund or ETF COMMISSION FREE.

No one tells you this about Vanguard, but it's in their advertisements.  Maybe I'm just so immune to advertising that I've ignored this fact, and even those talking about it here on the forums - I put the blame totally on myself here.  I have accounts at Fidelity (25+ years) ShareBuilder, and now Vanguard.  In a separate thread, someone noted that by buying VTI at Sharebuilder, even paying $2/trade, I was paying unnecessary commissions for buying Vanguard ETF's.  If (for example) I was to buy $20 of VTI every month as part of my Sharebuilder automatic investment plan, and each trade is only $2, that means VTI would have to go up by 11% to make a profit.  $200/month invested, and things look better... BUT...

If your investment strategy is to buy VTSAX, VTI, or any of the other Vanguard funds recommended by MMM (and the general badassity community), why would you want to pay ANY commission to trade these funds when you can trade COMMISSION FREE via a trading account at Vanguard?
« Last Edit: October 06, 2014, 10:02:23 AM by Mother Fussbudget »

sheepstache

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Re: Vanguard, a god?
« Reply #8 on: October 06, 2014, 09:58:19 AM »
Look at the costs. Fidelity has gotten much more competitive over the years for their passive funds. Most of our money is with Vanguard but I have a Roth IRA with Fidelity and have seen no need to yank it out.

BURN THE HERETIC

Mother Fussbudget

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Re: Vanguard, a god?
« Reply #9 on: October 06, 2014, 10:01:45 AM »
So I attempted to open a Vanguard account over the weekend (after maxing retirement accounts) and was told that I could not sign up online and I would have to mail in the forms along with my banking statement to get started. I just got confirmation from the mail carrier that they received my paperwork about 3 and a half hours ago. How long is the process for my account to be funded and up and running?

-Someone that is impatient

I opened account(s) last week.  I had the same situation - it took about 3 days from creating the account to getting my initial deposit (Roth IRA) transferred.  Thursday I decided to transfer my taxable account from ShareBuilder (!), and that also generated a form.  Sent it in Friday, and I'm expecting it to be complete mid-week.  Hang in there - the market will still be there when you get up-and-running.

windypig

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Re: Vanguard, a god?
« Reply #10 on: October 06, 2014, 10:10:53 AM »
The BIG advantage to having a Vanguard account?  Trade any Vanguard fund or ETF COMMISSION FREE.

No one tells you this about Vanguard, but it's in their advertisements.  Maybe I'm just so immune to advertising that I've ignored this fact, and even those talking about it here on the forums - I put the blame totally on myself here.  I have accounts at Fidelity (25+ years) ShareBuilder, and now Vanguard.  In a separate thread, someone noted that by buying VTI at Sharebuilder, even paying $2/trade, I was paying unnecessary commissions for buying Vanguard ETF's.  If (for example) I was to buy $20 of VTI every month as part of my Sharebuilder automatic investment plan, and each trade is only $2, that means VTI would have to go up by 11% to make a profit.  $200/month invested, and things look better... BUT...

If your investment strategy is to buy VTSAX, VTI, or any of the other Vanguard funds recommended by MMM (and the general badassity community), why would you want to pay ANY commission to trade these funds when you can trade COMMISSION FREE via a trading account at Vanguard?

USAA (my brokerage) allows me to buy Fidelity funds with no commission, I imagine fidelity does the same for their own funds.

So I buy Fidelity's Spartan lineup which has nearly identical expense ratios and performance to its Vanguard counterparts.
« Last Edit: October 06, 2014, 10:13:43 AM by windypig »

trailrated

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Re: Vanguard, a god?
« Reply #11 on: October 06, 2014, 10:30:54 AM »
So I attempted to open a Vanguard account over the weekend (after maxing retirement accounts) and was told that I could not sign up online and I would have to mail in the forms along with my banking statement to get started. I just got confirmation from the mail carrier that they received my paperwork about 3 and a half hours ago. How long is the process for my account to be funded and up and running?

-Someone that is impatient

I opened account(s) last week.  I had the same situation - it took about 3 days from creating the account to getting my initial deposit (Roth IRA) transferred.  Thursday I decided to transfer my taxable account from ShareBuilder (!), and that also generated a form.  Sent it in Friday, and I'm expecting it to be complete mid-week.  Hang in there - the market will still be there when you get up-and-running.

Hahahaha thank you for the heads up! I feel like it is Christmas morning, this was a goal I had for the year and I am sooooo very close now.

ketchup

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Re: Vanguard, a god?
« Reply #12 on: October 06, 2014, 10:51:07 AM »

trailrated

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Re: Vanguard, a god?
« Reply #13 on: October 06, 2014, 11:17:04 AM »
Update: 4 hours and 15 minutes after they received my paperwork the Vanguard account is now open, now I am just waiting for the bank transfer to go through. I assume that will take another day or two.
:)

trailrated

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Re: Vanguard, a god?
« Reply #14 on: October 06, 2014, 11:35:30 AM »
First look: The Vanguard site shows my first money transfer as pending and not available...but the app shows it as available in my account. I checked my bank account and the money has not been withdrawn yet...

tj

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Re: Vanguard, a god?
« Reply #15 on: October 06, 2014, 07:43:00 PM »
The BIG advantage to having a Vanguard account?  Trade any Vanguard fund or ETF COMMISSION FREE.

No one tells you this about Vanguard, but it's in their advertisements.  Maybe I'm just so immune to advertising that I've ignored this fact, and even those talking about it here on the forums - I put the blame totally on myself here.  I have accounts at Fidelity (25+ years) ShareBuilder, and now Vanguard.  In a separate thread, someone noted that by buying VTI at Sharebuilder, even paying $2/trade, I was paying unnecessary commissions for buying Vanguard ETF's.  If (for example) I was to buy $20 of VTI every month as part of my Sharebuilder automatic investment plan, and each trade is only $2, that means VTI would have to go up by 11% to make a profit.  $200/month invested, and things look better... BUT...

If your investment strategy is to buy VTSAX, VTI, or any of the other Vanguard funds recommended by MMM (and the general badassity community), why would you want to pay ANY commission to trade these funds when you can trade COMMISSION FREE via a trading account at Vanguard?

USAA (my brokerage) allows me to buy Fidelity funds with no commission, I imagine fidelity does the same for their own funds.

So I buy Fidelity's Spartan lineup which has nearly identical expense ratios and performance to its Vanguard counterparts.

Fidelity actually took over for uSAA's brokerage, so that would make sense. You definitely couldn't buy fidelity funds fee-free before the changeover.

Dan_at_Home

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Re: Vanguard, a god?
« Reply #16 on: October 11, 2014, 09:29:14 PM »
Seriously, Vanguard is the best place to get index funds from for your investments for the reasons the others said above.  It makes you wonder why the forum gets so many questions in the "Investor Alley".  This part of Mustachianism is pretty simple and straight forward. 

Investing your stash for FI comes down to 3 basic steps : (1) set up an account with Vanguard, (2) pick your asset allocation, i.e. 75% total stock market fund, 25% total bond market fund, or whatever percentages you choose and (3) choose deciding whether you use the non-taxable accounts (i.e. 401k, ira) for old man/old woman money or try to go for the Roth laddering scheme.  That is about it.

Now there should be not more questions in the "Investor Alley" portion of the forum from now on.  It has all been settled here :)




RapmasterD

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Re: Vanguard, a god?
« Reply #17 on: October 12, 2014, 12:40:16 PM »
Seriously, Vanguard is the best place to get index funds from for your investments for the reasons the others said above.  It makes you wonder why the forum gets so many questions in the "Investor Alley".  This part of Mustachianism is pretty simple and straight forward. 

Investing your stash for FI comes down to 3 basic steps : (1) set up an account with Vanguard, (2) pick your asset allocation, i.e. 75% total stock market fund, 25% total bond market fund, or whatever percentages you choose and (3) choose deciding whether you use the non-taxable accounts (i.e. 401k, ira) for old man/old woman money or try to go for the Roth laddering scheme.  That is about it.

Now there should be not more questions in the "Investor Alley" portion of the forum from now on.  It has all been settled here :)

+1

This is largely true for me although some will have differing perspectives.

Again, I care less about what is mustachian or not. But I do think it's interesting that Pete himself pretty much dumps everything, stock-wise, into the Vanguard Total Stock Market Fund
(LINK: http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/).

heybro

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Re: Vanguard, a god?
« Reply #18 on: October 22, 2014, 11:48:03 PM »
What is the laddering scheme Dan?

Otto

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Re: Vanguard, a god?
« Reply #19 on: October 23, 2014, 06:42:09 AM »
Im not Dan, but here's an explanation of the ladder.

http://www.madfientist.com/retire-even-earlier/

Cheers

johnhenry

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Re: Vanguard, a god?
« Reply #20 on: October 23, 2014, 09:21:48 AM »
Hey everyone.... I'll admit to being lazy.... I could try to just find this on the Vanguard website.  But, what do they charge for trades if you need to re-balance?

I'm all in Vanguard indexes, but I hold them at Wells Fargo, mainly because I'm grandfathered into a type of account that gives me 50 free trades per year.  I use these to re-balance our 3 accounts (taxable, roth, spouses roth) which each have maybe 7 to 9 Vangard funds.

2lazy2retire

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Re: Vanguard, a god?
« Reply #21 on: October 23, 2014, 01:28:22 PM »
Look at the costs. Fidelity has gotten much more competitive over the years for their passive funds. Most of our money is with Vanguard but I have a Roth IRA with Fidelity and have seen no need to yank it out.

BURN THE HERETIC

http://www.youtube.com/watch?v=sglyFwTjfDU

Datastache

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Re: Vanguard, a god?
« Reply #22 on: October 23, 2014, 09:34:37 PM »
Vanguard is fantastic. My employer offers a 401(k) with company match through Fidelity, so I'm of course using that as well, but all my other investing happens through Vanguard and I've never regretted it.