Vanguard INDEX FUNDS for BEGINNERS [Step by Step Tutorial]

Описание: Today I’m going to break down how Vanguard works and how you buy index funds, which ones do I buy, and why. And we will go over the basics of how they work.

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1. Index Fund vs Mutual Fund vs ETF

Mutual Funds: These are funds that are managed by experts and they have one goal, which is to outperform the market every year. So they constantly trade and buy, and because of this they usually have a higher Expense ratio ( which how much it cost to own the fund) and they also have more taxes. ( think active)

Index Fund (a type of mutual fund): Also has a manager but they are not really doing that much buying and selling. Their goal is to track the market performance and not beat it. And because there is less movement, there obviously going to be lower fees. ( think passive)

ETF: Electronic traded funds, they can be either mutual based or index-based, but they are traded in the stock market and the prices are updated every minute, and they usually are cheaper to own also.

2. How to Buy With Vanguard and the Basics of Using it and prices

Tutorial:
Just go vanguard, and select investments and mutuals or ETFs ( remember an index is also a type of mutual fund)
Then select your filter by active and index management
Notice you need a minimum to start usually around 3k, which is a lot of money
So sometimes buying the ETF version is a better idea

Compare expense ratio:
With actively help small-cap growth
And index held growth
And show how it cost 9 times more

Tip: if I’m being honest the only reason I also own index funds, is for retirement saving purposes. ( its cheaper and more convenient to own)

3. The way I invest
Dollar-Cost Average ( how frequent I invest to get the average)
Diversification ( that’s why I invest in 7 different ETF’s)
Compound interest (the time I give my investments to grow)

The bonus here: my strategy is to invest more than 50% of my income, so my portfolio can cover all of my expenses. By using the 4% rule.

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Disclosure & Educational Disclaimer:
Some links in this video may be affiliate links, and I may earn a commission. Content is educational and accurate as of posting; offers may change. I’m an accountant but not your accountant; always consult your own accountant/CPA or financial advisor. No income or results are guaranteed.