Switching investments from Edward Jones to Vanguard

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Vanguard investment strategies are all over the personal finance blogs. Passive dollar cost averaging into portfolios has a certain sexiness to it that I didn’t appreciate until after I did it. And once I did, dang it felt sexy. The whole strategy can be summed up into “lower fees from passive index investing creates more wealth for yourself and in 97% of the cases, better performance as well”.

For 8 years I invested with Edward Jones. I read about 10 books and 500 blog posts on personal finance include I Will Teach you to be Rich. I changed my spending and saving habits. But I was reluctant to change my investing habits. But after running my own analysis, I realized that excessive fees were costing me lots of money.

I don’t want that to happen to you.

I was paying 5% load fees and 1.5% expense ratios. I was also paying 2% dividend reinvestment fees, and account maintenance fees. It was enough to make me mad.

But I didn’t switch over because I believed I was paying for solid performance.

I had my reasons. I didn’t want to upset my broker at Edward Jones, I didn’t want to lose money in taxes and fees and I didn’t have any experience with Vanguard. But with the wool pulled from my eyes I realized I had to do something.

In 2015 I opened a Traditional IRA with Vanguard, once I had my oilfield job.

Then I tracked performance and saw better performance in vanguard less fees. Once I had that information I knew I needed to make a change.

I had wasted 3 years and hundreds in fees telling myself that I needed to switch. But once you have momentum it’s hard to stop it. It’s why 2.1 million people still pay for AOL internet from a CD they got in the mail in 1998.

I Finally did an in-kind transfer from EJ to Vanguard.

It’s been 8 months and here are my takeaways.

The end of excessive fees

Roth Ira was $100/year

Vanguard has no loads, and some of the smallest expense ratios in the business. With a minimum 3,000k to invest.

Processing fees to change over

$100 per account to roll them over. Bullshit but worth it to be rid of their loaded funds.

Forms to fill out

You only need a form from Vanguard. This one. I filled it out, signed it, and within 2 weeks my account was fully moved over to vanguard from Edward jones. I got a call from Edward jones asking about canceling the auto draft from my bank. I told them to cancel it, said thank you, and got off the phone.

That was it from Edward Jones. I spent 3 years procrastinating on it. All it took was $200, a 10 minute form, and a 1 minute phone call. Finally high fees were a thing of the past.

Current management ratios

My current ratios range from 0.20% to 0.06% in the Vanguard funds I am invested in. 0.43% in the ETF’s I am in.

Passive investment

Each month I have set amount of money taken from my bank account and processed without loads into buying Vanguard shares. It’s the right kind of momentum.

Linking up banking information

Takes a few minutes, but all they need is a banking account number and routing number. Set up an auto-investment and then lay back in a hammock.

Better Website

Easy to find portfolio breakdown and performance. Really good infographics and tools on the vanguard website for a passive investor. The Edward Jones site was clunky and hard to find real numbers.

That’s what I’ve noticed. I’m glad a made that change at an early age. I now I want to take a calculated risk.

Future investment plans

After the 2009 financial meltdown everyone the irrational exuberance of the market play out. Right now I’ve moved into large (60%) bond positions to conserve capital and to prepare for a 25-50% market drop before buying into admiral index stock funds. When this will happen I am not sure. But I do know that it is way more likely that the bull market will end sometime. I’m just preparing for it in the same way Mr Money Mustache has.

Recent books I read on Personal Finance and investing that were good.

Bachelor Pad Economics: Funny, engaging, actionable.

https://www.youtube.com/watch?v=jAf7I5gl72A

Money: Master the Game: Great All-Weather portfolio allocation strategy.

 

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Author: bourbonribeye

Deepwater Mudlogger in the Gulf of Mexico

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