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My wife and I have all our investments with usForefront.
IRAs. College savings accounts. Regular investment accounts. They are all there andall are invested in Vanguard funds.
To be clear, there are plenty of great investment options available, and I don't believe Vanguard is always the right choice for everyone. Depending on your specific goals and needs, you may be better off elsewhere.
But there are some specific reasons why I chose Vanguard for myself and my family, and I want to share them today so you can make a more informed decision when choosing your own investments.
Quick note:I have no affiliation with Vanguard, they aren't paying me for this post, and honestly, they have no idea I'm writing it myself. This is 100% my personal and professional opinion, based on my research and experience.
The big advantage of Vanguard
“Vanguard's ownership structure makes John Bogle one of the greatest philanthropists of all time – without writing a check.” –Morgan Housel
Vanguard has a number of advantages that I'll talk about below, but they all stem from what at first glance sounds like the driest, most boring topic imaginable:
Ownership structure.
Most investment firms, like most major corporations around the world, are owned by shareholders, and those shareholders obviously want to make money. Thus, from a business perspective, investment firms' incentive to charge higher fees is to maximize the profits they pass on to their shareholders.
But Vanguard is different.
When John Bogle founded Vanguard in 1974, he set it up like thisVanguard was owned by its customers.
When you buy shares in an investment fund, you become a co-owner of this fund. And at Vanguardthe entire company is owned by its mutual funds, which means that as an individual investor you also become part owner of the entire company when you invest in a Vanguard fund.
So what does that mean?
This means there are no third party owners to appease. This means that business decisions are made for the benefit of Vanguard's customers. This means that profits are distributed to customers in the form of lower fees.
No other investment fund provider works this way. And that difference leads to some pretty big benefits.
Rockbot cost
Cost is an indicator of quality for many things. If you want a better car, better clothes or a better laptop, you generally have to pay more money.
And so it turns outcosts are also the best predictor of future investment returns. It is precisely the LOWER cost investments that appear to have the highest quality.
The less an investment costs, the more likely it is to yield better returns.
So while this isn't the only factor I consider, keeping costs to a minimum is one of the most important parts of my personal investment plan.
And the thing is, Vanguard has consistently raised the bar on reducing the amount of money investors have to pay.
Other companies offer low-cost investments here and there, and they are certainly worth considering when putting together your plan. But Vanguard is the only company I've seen that consistently minimizes costs across the board, regardless of the type of fund you're talking about.
It's a big part of their company's mission, and the reason for that lies in the ownership structure. When customers own the business, the incentive is to minimize costs. Since there are no literal shareholders to pay, there are no conflicts of interest.
So not only do I appreciate the low-cost funds Vanguard offers today, but I also trust that they will continue to lead the way in lowering costs in the future. Which should lead to a better return for me and my family.
They basically invented index funds
I'm a big fan of index investing, both because it's incredibly simple and because the best research we have says it's the most effective way to invest.
And while Vanguard technicallydid not invent the index fundJohn Bogle created the first index fund ever available to the public in 1975, and Vanguard is largely responsible for the incredible growth of high-quality, low-cost index funds available today.
In other words, Vanguard pioneered index investing, and they continue to lead the way. There's a reason why the largest independentrobo-advisorsbuild their portfolios primarily with Vanguard index funds. It's because they're good.
Other investment firms have followed suit and many of them now also offer high-quality index funds. But my money is on the company that has been doing it for decades.
INVESTING MADE EASY
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Simplicity
Having all my investments with Vanguard makes my life easier.
I only have to log in to one website to view my portfolio.
I don't have to worry about trading fees because there are no trading fees when I use Vanguard's funds.
They offer every account type I've ever needed (and can anticipate).
They even offer a range of all-in-one remedies, in case I want to keep thingsRealsingle.
All of that makes investing as simple as possible, which means I can spend less time sweating the details and more time investingthe things that really help me move forward.
It all comes back to trust
I like to work with companies that I trust will do the right thing for me. And when it comes down to it, that's the main reason I like investing with Vanguard.
Yes, the funds are good. Yes, the costs are low. And yes, I get everything in one place. That's all important.
But most of all, I trust that these things will remain true in the future. And it ensures that I know that my investments are on the right track.
