Paying yourself first tends to force you to make do with a more meager payday. True, and I do both. VOO, on the other hand, also has the lower 0.
Glennon Small Companies Limited. Gryphon Capital Income Trust. Hastings High Yield Fund. Mercantile Investment Company Limited. Monash Absolute Investment Company Limited. Naos Ex Opportunities Company Limited. New Guinea Energy Ltd. Plato Income Maximiser Limited. Sandon Capital Investments Limited. Wealth Defender Equities Limited. Westoz Investment Company Limited. Watermark Market Neutral Fund Limited. Aurora Global Income Trust. Ellerston Asian Investments Limited. Ellerston Global Investments Limited.
Fat Prophets Global Property Fund. Mutual fund expense ratios are calculated on your holdings, not on what your holdings earn so if you lose in a given year, the fund still makes money on your holdings. Text seems to imply that all profitable public companies pay dividends, but many choose not to pay dividends. MMM May 19, , Yes, those are valid points — the expense ratio applies every year, but it is true for all mutual funds so the key to maximizing profit still lies in comparing and minimizing these expense ratios.
Otherwise they would be a profit-making, non-growing, non-dividend paying company. The company will just build up an infinitely large cash hoard, which does not benefit shareholders. At this point, the shareholders would get antsy and vote to have the money distributed to them as dividends.
Its dividend is a very high 4. Marcel Grünauer May 25, , 3: The Vanguard Index Fund does indeed sound like a good idea; however, I live in Austria, so there are two considerations:. MMM May 25, , 8: Good question, although I do not know much at all about investment from a European perspective.
Maybe another European is reading who can speak up on their investment perspectives for US and world stocks. Also, you are right that fluctuations between currencies will add an extra variable to international investments. Even here in the US this is true — I do have some international index funds and they are showing great gains right now since they are expressed in US dollars, while the other currencies have appreciated relative to us.
If the Euro is strong now relative to US, it could be a good time to buy US stocks if you believe the US dollar will recover eventually. Denisa September 1, , 9: Hi, I am also interested in european index funds and I did find something on the Vanguard site. Seems like they do offer the same package on the european market, but with expense ratio 0.
This is the link: MM, please let me know what you think, since I am a novice in the matter. Marko May 30, , I started reading your blog from the beginning after reading through the most popular articles upon finding it a couple of weeks ago. I find this topic still interesting because I am in a similar situation as Marcel.
Are there any new resources in the last 5 years where I could read upon this topic? Pedro December 3, , 4: I am in the same situation.
I think that is what you are looking for. Manfred May 18, , 1: I am wondering if anyone can share any experiences regarding investing in Index Funds outside of US since then? I am in a similar situation as Marcel: I am from Austria living in Spain. An alternative I am trying right now is https: I can share my experiences later. Stef May 22, , 5: Acorn May 25, , 1: I have quite a bit of cash sitting around earning nothing in savings accts and money market accts.
Some of the money needs to stay accessible for college tuition and the rest will probably go towards paying cash for a home. Would you recommend using an index fund in this situation, or should I just grin and bear the lack of any income from the cash? MMM May 25, , If you are feeling very adventurous and are prepared for the possibility that the value of the investment may go down before it goes up , you can still go for the index fund.
Gambling can be fun when the odds are in your favor. When the stocks go down, the bonds go up, so the fund is more stable. The reason is because losses get magnified. Three years after the low in you are just getting back to your money. So typically if the market takes a loss which occurs on average, but not predicably, one out of every four years, you can easily end up losing money.
That is why most financial advisors typically recommend any money you need in the next 5 years or so not be in the market. Acorn May 26, , 3: Thank you for your many replies Mr. I started at the beginning of your blog and worked my way forward, such wonderful information you have offered. Exotic Hamster June 10, , I might be missing something. The expense ratio is far less in the ETF.
MMM June 11, , Good point — looking it up, the VOO index tracker has an expense ratio of 0. For a buy-and-hold investor, the VOO could save some money. But to buy an ETF, you usually need a brokerage account. If you are making monthly or bi-weekly investments to an from your paycheck, your trading costs might add up to much more than that: The expense ratio of the Admiral shares is only 0. Exotic Hamster June 11, , If you have a brokerage account with Vanguard you can trade their ETFs commission free.
NAV and capital gains deferral. Nick September 15, , 2: I think this would really help beginning readers like myself. Keep up the good work! Alex October 13, , First off, I recently discovered this blog and now I am consumed by it. Your perspective and attitude is exactly aligned with mine, and your style is much more entertaining to read than many other financial blogs. Ok, enough with the compliments.
I also looked into TD and have noticed they have a new e-Series fund account that significantly lowers the management fees on index fund purchases. Does your expert panel have any tips for how to best direct your investment dollars in Canada? Andy October 23, , 1: However it is important to also consider further diversification, by different asset classes and geographical areas property, REITs, bonds, international stocks and emerging markets etc.
Had I read these books 10 years ago and diversified accordingly, I would have benefited from the extra diversification in bonds and emerging markets, while my home market failed to make any significant progress over the decade. Katie November 7, , 6: Yuriy December 19, , 5: Ah the expense ratio explains why you push the Vanguard fund so much. I am still in the early 20s gambling on the stock market stage, but trying to push myself to think longer term about where I put my money.
Maybe you have some thoughts about an issue I have with most index funds: This is good for dividends, but I see it as a problem — I cannot morally bring myself to invest in many of these companies. Looking at the top 10 holdings for a few index funds, I see stocks like Exxon-Mobil, Microsoft, Phillip Morris, Apple — companies that individually I would not invest in on principle.
This is my problem, too. So sorry if you addressed this in another post; I have not read every single one! Andres September 20, , 2: I was going to leave a very similar comment, but you beat me to it.
Angela July 14, , I think land lording sounds kinda fun. Elle December 17, , 6: Money Mustache December 17, , 2: But it could still be an improvement over owning ALL shares. Tess January 2, , 2: Fund philosophy is here: Commercial real estate is trending very strongly toward energy efficiency and sustainability so I feel good about this. If I were less concerned about return or had more capital to play with I would definitely absolutely no-question purchase Calvert funds.
You can select funds based on different moral priorities. John February 24, , 2: If you search for Vanguard they have some funds that are industry specific and fossil fuel free: Technology, Real Estate, and Health Care.
Amicable Skeptic December 21, , 2: Great blog MMM, I stumbled upon it a few days ago and have been entranced reading all your entries. This one has made me think about my own investment strategy and come out of the shadows to actually posit a question.
So, I was literally grandfathered in to a Fidelity account, my grandfather set it up for me back when I was in high school, and have thought I was being wise by investing in FSTMX in it. What do you think? DBestAQ February 16, , 2: Your insistence that the Vanguard Index Fund is the way to go has me looking over my portfolio.
Please help me get a handle on this. Currently my portfolio is diversified between Stock, Bond, Blended, and Income investments. Vanguard Index is available, with an expense ratio of 0. My question is this…The average annual returns for the Mainstay are much larger than the Vanguard….
It would appear that even with the higher expense ratio, the Mainstay comes out more profitable in the long run. What are your opinions? Money Mustache February 16, , 3: In general and statistically speaking, funds with higher expense ratios like that Mainstay one will lag a low-cost index fund.
If you happened to beat the market over a random time period, consider yourself lucky! But the odds are in your favor switching to an equivalent fund with lower expense ratio at any convenient point. Hanne van Essen April 9, , 8: I am a new reader of your blog from the Netherlands.
Slowly on my way to be a Mustachian maybe, by getting the mortgage paid off and figuring out what is was again we are earning money for.
Anyway, I have invested in Index funds in the past, but have sold it all recently. Even if the cost is low, it is still a Bank Product, so you are paying your bank money for something you can easily do yourself.
Just find out what stocks are in your index, at which ratio, and make your own little basket of stocks. It is true that the basis for buying should not be to outsmart the market, but just follow the index. As for combining indexes, American and European for example, this is in itself not a bad thing, if done out of risk-spreading motivation, instead of the outsmarting motivation. Money Mustache April 9, , 8: An index fund does tens or hundreds of small transactions per year in its job of tracking the index, but it gets those transactions almost free on a cost-per-shareholder basis.
As an individual investor, you have to pay several dollars per trade. It all depends on the expense ratio of your fund — you can do your own math, but the US company Vanguard offers expense ratios often below 0. In other countries, this cost is sometimes more than ten times higher, which would change the calculations somewhat.
Finally, holding your own stocks can still be valuable for other reasons. If it motivates you to learn more about business, finance, and investing in general, the benefits might outweigh your trading costs. Hanne van Essen April 9, , Thanx for your prompt response. Mr Llama May 3, , 1: It is not possible for us non US residents to invest directly in US mutual funds — we can only invest in ETFs and there are very few US brokers who are willing to take on international clients generally only the most expensive ones.
And finally there are no K style retirement accounts. Darin August 1, , 9: It is worth your time to look it up the next time you bike down to the Library. Matthew Day August 29, , 9: I am 20 and I am in college studying mechanical engineering.
Do you have any cheaper recommendations? AdventurousZ May 11, , I have one with T Rowe Price, although I would recommend shopping around, Vanguard may offer something similar with a lower expense ratio mine is. I thought no load fund meant free, sneaky companies. Ashley October 3, , 9: Did you find anything that fit your needs better? Darren March 2, , 2: When my son was 8 we bought his first stock. I let him choose. MMM alluded to it in talking about automatically investing dividends and in turn automatically buying more shares.
I have quite a bit invested in TransAlta right now, and even though their share price has dropped quite a bit recently they still have a healthy history of dividend payments. This means as long as the dividend stays the same, and the share prices go down, my dividends will only buy more shares.
For this to work well I need TransAlta to eventually recover but based on their history, and industry utilities I believe they will. John Milne October 11, , 5: Wondering if you have a current suggestion for investing in Canada. My wife and I are finally in a position out of debt! Or should we just stick with it? Linda December 27, , 1: Vanguard is available in other countries: See their International website and see if your country falls under one of their sections: I suspect that in most cases, the investment is in an ETF rather than Vanguard funds, so you will need a broker.
Go to the link above, click on your area Australia covers New Zealand as well by the way , and view their list of ETFs. Take note of the stock exchange code, and call your broker to invest. Some caution is required with ETFs when purchasing. So always make sure you set a limit order.
This ensures you purchase your ETF shares at a set price or better not worse. Elizabeth April 9, , 6: Thanks for the tips, Linda! All relevant comments will be reviewed and displayed promptly. Name required Email Address required Website. Easily find ALL low cost mutual funds. Get the 2-for-1 Special. Also available at major stores:. Click bookcover to learn more. PDF format from our website. This personal finance, personal financial planning, and personal investment management information is solely for your informational and educational purposes related to your personal, private, and non-commercial use.
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