Young guy here (27). Maxing out my Roth IRA. Have $40k not doing anything. Opened betterment account, not funded yet. Want to earn more than the 0.20% from bank savings. Want to be 100% in stocks, no need for bonds at this point. My IRA has VT & VHT.
Betterment or some Vanguard funds?
Betterment: 0.25% costs + expense ratios, Tax Loss Harvesting, automatic rebalancing, "fractional shares" so no uninvested money
Vanguard: free + expense ratios, no TLH, no automatic rebalancing, no fractional shares so potentially some money left on the table
What's better for the **long term**? Any significant differences? If Vanguard, what ETFs or mutual funds? Looking for minimal taxes obviously.
Comparing Vanguard and Betterment is like comparing oranges and orange juice. You're paying a premium for the squeeze, when you could easily do it cheaper (and possibly better) on your own.
Betterment just sells you other people's index funds. Betterment allocations include at least 60% Vanguard funds, and even the funds that aren't Vanguard are knock-offs of Vanguard funds.
My Roth IRA is with Vanguard. Adding a brokerage with them makes me feel rich.
Anyways, should I just dump everything into VT? Or really break it down into US & international allocations? I just want growth for the long term.
Anyone use Wealthfront? Can they be compared to either of these two? Right now all my money is in an ally savings account which earns around 1% annually. I'm wondering if any of these three could beat that.
I'm in a similar boat to you OP, but I only have about $24k a year after my IRA to contribute. I'm trying out a few different things. I put a bit into betterment but decided to go with vanguard instead. I've also put some money into lending club as well and I'm using a very small portion to trade on my own. I figure the more hands off investing from lending club and vanguard will work for now and if I decide I'm more confident in my own I could always add a bit more.
>Anyone use Wealthfront?
Literally the same as Betterment. They sell other people's index funds to you, and charge you for the privilege. More than half of their primary funds are from Vanguard.
Which begs the question: why not buy directly from Vanguard and skip paying the middle-man?
>Also, next time, do your own homework. It took me 5 minutes to find this information on the Wealthfront site. You need to have the financial IQ to figure this stuff out on your own.
I'll avoid VT since its not the cheapest way to go.
I'm an idiot:
More questions if anyone can help.
1. My transfer into Vanguard is pending.........damn holiday gonna be until Tuesday for the transfer. When possibly can I use the money to buy stuff?
2a. Regarding tax efficiency, are ETFs or mutual funds better for a taxable account? I see more things saying ETFs are more tax efficient. But between Vanguard ETFs & funds it doesn't matter because of Vanguard's patents / ETFs are a share class of funds / something else????
So I figure funds >> ETFs because cheaper E/Rs, no "lazy penny" (un-invested money due to whole shares of ETFs), & same tax efficiency. Am I wrong?
3. What would be your personal split between VTSAX (US Stock) & VFWAX (International Stock)? 50%-50%
What do you guys think about
VFIAX - 500 Index Vanguard Admiral Shares
VIGAX - Growth Index Admiral Shares (Large Cap)
VIMAX - Growth Index Admiral Shares (Mid Cap)
VWGIX - International Growth
VFWAX - All World ex-US International Index
VBTLX - Total Bond Market Index
How much should I allocate to the following (percentage wise)?
How should my portfolio look like?
I'm coming out of college and I have a high paying job and zero expenses so that's why I have so much growth indices on that list.