Dropping Edward Jones and moving my money to Vanguard

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Vanguard investment strategies are all over the personal finance blogs. Automated dollar cost averaging into passive index funds has a beauty to it that I didn’t appreciate until afterwords.

  “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. But I was reluctant to change investment strategies. I was young and didn’t want to devote too much time to investing.

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 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

Edward Jones charges a lot to people. A Roth IRA is $100/year. Vanguard doesn’t do this.

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. It’s 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. And 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.

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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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