4 ms·
> One of the odd things about Bogleheads, however, is that, once you're up to speed, have your accounts set up, no unusual events, and you take the "index on au
by rewtraw 6y ago
> One of the odd things about Bogleheads, however, is that, once you're up to speed, have your accounts set up, no unusual events, and you take the "index on autopilot" to heart... frequenting the forum then seems counterproductive, like it becomes temptation to tinker with financial arrangements, or just a distraction from better things to be doing.
That's what I've recently discovered. Dumping everything into VTSAX is the best thing you can do to your investments, but then... where's the excitement? So I've allowed myself a "fun money" brokerage account that I initially deposited $5k into, and just play with options trading. I've already paid myself back the initial investment, so any profit/loss from now on is irrelevant. This way I can still geek out over investing, but not gamble my life savings.
- potiuper 6y agoVTI is the ETF version of VTSAX; has lower expense ratio
- ed25519FUUU 6y agoI prefer the mutuals because I can invest money that day. With a broker account, there’s the ACH waiting period, so you miss out buying dips.
- throwaway5792 6y agoBrokerages can front you the money to buy while your ACH transfer is being processed. Robinhood calls it Instant Deposits, but I believe others offer the service too for free.
- ivalm 6y agoUse a margin account if that matters to you, still cheaper than paying higher expense ratio.
- jasonv 6y agoWhat's the relationship here between EFI, mutual funds, and "margin account/higher expense ratio"? Would anyone be willing to explain this comment thread to a newbie?
- atombender 6y agoIn this thread, one person is saying they prefer MFs because they don't have to wait for an ACH transfer to complete, the other person is telling them to buy ETFs with a margin account (that is, using credit), because — as I interpret them — the cheaper ETF would be worth the interest on the margin. But in this case, it's nonsensical if you're comparing VTSAX (0.04%/year expense ratio) and VTI (0.03%). If you have $10m in your account, the difference is $1k per year. Often, ETFs have lower expense ratios because they are cheaper to manage; historically, mutual funds have had high fees, even for passively managed funds, and Vanguard is one of the companies that have worked to bring the fees down. But it's not always true that MFs are more expensive. VTSAX's ER is 0.04%; its ETF equivalent, VTI, is 0.03%. The difference is effectively zero.
- ivalm 6y agoI mean, many brokerages will extend margin for free during ACH transfer (or any settlement event for that matter). So using a margin account and buying the ETF will save you one basis point in fees every year. If you have a 30 year horizon it becomes ~20-30 basis points depending on contribution+return schedule. 20-30k on 10mm is not super much but not negligible either since it takes no effort.
- ed25519FUUU 6y agoWhich brokerage offers free trades and also extends margin during the ACH period? Robinhood only extends $1k at a time.
- ivalm 6y agoTDAmeritrade will extend no interest margin for transfers iirc. I haven’t looked at robinhood in a while, but I believe they will extend instant deposit beyond $1k. I remember I had maybe 70k with them a year ago and my instant deposit was 50k. It still has to be no greater than max marginable value (so you can’t do it on a fresh account).
- _k1yh 6y agoI do exactly this! VTSAX,VBTLX, and have a fun account. My fun account has made me much more aware of global scientific news and research as I see my stocks jump up or level off; really neat understanding why.