Dropping Edward Jones and moving my money to Vanguard

vanguard-windsor-ii_large

Vanguard investment strategies are all over the personal finance blogs. Automated dollar cost averaging into passive index mutual funds has a certain sexiness to it that I didn’t appreciate until after I did it. And once I did, dang it felt sexy.

Basically,  “lower fees, from computerized passive index investing versus active management, leaves more wealth for yourself, and in 97% of the cases, gives you better portfolio performance as well”.

For 8 years I invested with Edward Jones active mutual funds. And they did okay.

Beginning in college I read books and blog posts about personal finance, including I Will Teach you to be Rich.

I mainly changed my spending habits.

I was reluctant to change investment strategies.

After running my own analysis, I realized that excessive fees were costing me lots of money.

And I don’t want that to happen to you.

I was paying 5% load fees, 1.5% expense ratios, 2% dividend reinvestment fees, and account maintenance fees.

What I didn’t know was really hurting my investment portfolio.

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

-I didn’t have any experience with Vanguard.

But when I read Money: Master the Game by Tony Robbins, and his chapter on fees, I realized I had to do something.

In 2015, I opened a Traditional IRA with Vanguard.

Then I tracked performance for 2 years and saw better performance in vanguard along with 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. .

For a disclaimer: I am not an investment professional, and this is not investment advice. Past performance does not predict future performance. This is purely entertainment writing.

With that out of the way. Here are my takeaways.

The end of excessive fees

EJ Roth ira was $100/year. Bullshit.

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.

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 to EJ, 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% ratio for gold ETF’s.

Passive investment

Each month I have set amount of money taken from my bank account and processed without loads into buying Vanguard shares.

I did this before. But it’s still important to build that money machine as a young man. Time is on my and your side.

Warren Buffet wrote an Op-ed piece in 2008 during the tumultuous Financial Crisis. “Buy American. I am.”

The S&P 500 was a roller coaster that month. The largest percentage swings in history.

The day his article was published the S&P was at 909.53. His critics slammed him. But a 9 year Bull market vindicated him. Today the S&P stands at 2,500.03.

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

I turned 18 on the day of the largest point swing in S&P 500 history, -106.95.  This current 9 year long bull market will end. Everything that goes up will come back down. I’m 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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