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.

 

Delicious routines: Why a Jazz drummer eats 2 Chipotle burrito bowls a day to explode his creativity

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2 Chipotle Bowls a Day: The (Delicious) Power of Routine

When I first read the headline I thought that’s a great rationalization for being obsessed with Chipotle. My next thought, I want Chipotle right now.

Before you also get the craving and leave know that this Jazz Drummer and Entrepreneur inspired me. A year ago I set a goal to write more. I accomplished that goal using his method for lowering activation energy and setting up an easy routine/system.

Yoni’s creative process begins with his Chipotle system to save time and mental energy.

“Anchoring your routine around something by eliminating unnecessary choices to consume and shift mental and physical energy toward the projects that truly deserve them.”

Routines provide stability and channel your energy.

Yoni’s 2 bowls a day Chipotle routine inspired me to set a writing routine while I was stuck working on a Drillship.

He makes an interesting analogy with jazz drumming: his fundamental drum beat is Chipotle. All the variations and creative fills occur because of his fundamental beat.

Besides making me want Chipotle, I reflected on the time I devote to planning, buying, preparing, cooking, eating and cleaning up for meals. This is probably why I write more offshore than when I am onshore. I love to cook, but it definitely cuts back available time and energy to write.

Achieving creative bliss by lowering Activation Energy

Yoni eats healthy delicious meals, then put his time toward being a professional drummer. When I first read this article about a year ago I wanted to begin writing more on my blog. So I decided to set up a system.

Write 2 sentences a day

If I wanted to write more each day I would, and I usually did. But setting such an easy goal made it laughably easy. And as my man Mr. Money Mustache has said,

small efforts, repeated over time, will almost always surprise you.”

Sometimes I don’t write on days, but I’ve never stopped by being discouraged because the goal of 2 sentences was so low.

Lowering the activation energy of those tasks by eliminating the excuse that I don’t have time has proved to be the catalyst for incorporating writing into my daily routine.

I have a word document saved on my computer called 2 sentences a day. I am now at 119 pages and 67,000 words.

Yoni has his 2 bowls, and I have my 2 sentences.

My preference at Chipotle:

Chicken Fajita Bowl with brown rice, black beans, corn salsa, tomatillo green salsa, lettuce and guac.

Always finish Strong.

The Yoni Dina Chipotle Routine on Art Of Charm.com

How I paid for my vacation to San Miguel de Tucuman, Argentina

Studying abroad in Tucuman, Argentina was a turning point in my life. Now at 23 I want to return to see friends I made when I was 16. When I got my job in the Oil Field I made sure that my first vacation would be back to Red Clay Courts of Tucuman.

I come from a middle class family who believed in hard work and the promise of education. Through college I worked odd jobs and saved money.

In sophomore year I listened to a podcast from Ramit Sethi, and promptly bought his book, I Will Teach You to Be Rich. A crazy title I know, but that ostentatiously titled book laid out the basics of money management.

All together the 18 day trip cost me $2400. When I got back my bank account wasn’t empty and there was no money hangover in the form of payments to credit card companies. This journey taught me how to save and be frugal; habits that will stick with me for the rest of my life.

Argentine Asado.
Argentine Asado.

1) The biggest strategy was Automatic bank withdrawal into a high yield online savings account with Capital One 360. $50 to $150 withdrawn without me having to move a muscle. Slowly building up money for 24 months, this was how I bought my ticket straight up.

Open an account now
2) Bring stuff to sell there. This was something I researched before going down. In Argentina Iphones are highly prized due to import restrictions and high tariffs. Labtops, ipads, and anything Mac related will sell for high prices. I took down skateboards to sell to my friends for a steep discount and in exchange for staying at his place.

The Country where an Iphone cost $3,500
3) Learn how to cook. I began with Mexican food. Its a lot of cleanup so I wouldn’t recommend it for beginners. I would recommend grilling a whole chicken.

 

4) Got on Mint and started tracking all my spending. I used to spend irrationally at the grocery store. I used to have a full refrigerator. Now I buy for 1 week, and use up everything. I have cans of soup for when food gets low, but I enjoy being creative with meals.
5) Buy a bike. I use it all the time being close to the grocery store, and gym. I save money on gas and repairs for my car.
6) Follow Personal Finance Bloggers. Ramit Sethi helped me negotiate my rent down 15% using his scripts in my emails. I ended up saving $800 from 1 email.
7) Take care of the stuff I own, I like to keep the stuff I have equal. If I buy something like a new shirt I have to either give a dress shirt away or throw it out. I clean the shoes I own and now they last 50% longer than before. Learn how to wash certain things. Jeans don’t need to be washed that much, and when you do, make sure to flip them out. When my phone screen cracked, I learned how to repair it online and bought a kit to do it. Now I have repaired it twice.

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8) Bring cash. The official rate is 9 pesos. Dollar Blue is 13 pesos. Bring $100 bills only. Go to where the banks are and people outside will trade with you. Listen to the word, “Cambio”. It means change in Spanish.

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9) Get a Skymiles credit card. Got into the lounge area for $30. I had food, drinks, Wifi, and a shower. Yeah it was worth $30 to pass 5 hours in the Atlanta airport. If I could do it over again I would have opened up the card 2 years ago. You can ask for a limit increase every 6 months. Right now my limit is only $1000. And tickets to Argentina are between 1,300-2,000 roundtrip. This is to save up miles for my next trip to Tucuman.