Where will we find the cheapest index funds?
UPDATE 2: I’m updating this article to reflect new information coming from Fidelity Investments making significant reductions to the costs of their index funds on August 1, 2018 and changes to Vanguard’s fee structure on December 1, 2018.
Let’s have some index fund fun today.
Many in the Financial Independence Retire Early (FIRE) community recommend VTSAX (Vanguard’s Total Stock Market Index) as the investment of choice.
Why is that?
If you are in the Choose FI world, then you’ve heard of the Godfather of FI, Jim Collins.
You may know he is a huge fan of Vanguard as the mutual fund company of choice.
Does it have the cheapest index fund fees?
Does it have the lowest investment minimums?
It turns out…
It does not.
Then why does he recommend it?
I’ll get to that…
One thing I did the first time I read The Simple Path to Wealth (I ended up reading it about 15 times as his editor on the book) was check all my current investments to find out if I was paying too much in fees.
I’ve always followed the simple advice of Warren Buffett.
Invest in index funds.
I don’t believe investors can or should try to beat the market.