Before the November 2016 presidential election, I deposited $ 8,000 and bought the Index and other Indices such as IWM (Rusell) and QQQ (Nasdaq) – without paying a penny for commission.
- How to buy Vanguard funds in Belgium
- The appeal of Vanguard funds
- Where You Can Buy Vanguard Funds (Besides Vanguard)
- Pros and Cons of Buying Vanguard Funds through Other Brokerages
- Best index funds for January 2022
- 1. Fidelity ZERO Large Cap Index (FNILX)
- Why are index funds so popular?
- 2. Shelton NASDAQ-100 Index Direct (NASDX)
- 3. Invesco QQQ Trust ETF (QQQ)
- 4. Vanguard S&P 500 ETF (VOO)
- 5. SPDR S&P 500 ETF Trust (SPY)
- 6. Vanguard Russell 2000 ETF (VTWO)
- 7 iShares Core S&P 500 ETF (IVV)
- How to invest in an index fund in 3 easy steps
- 1. Research and analyze index funds
- 2. Decide which index fund to buy
- 3. Purchase your index fund
- Is it Possible to Avoid Trading Commissions on S&P500 ETFs (VOO and SPY)?
- How to Buy S&P500 Index Fund For Free with Robinhood in < 10 minutes
- Vanguard International Explorer Fund
- Vanguard Dividend Growth Fund
- What Past Buyers Were Able to Buy and Hold?
- TL;DR Advice for Young People Investing in VOO
- M1 Finance vs. Vanguard – Extra Features
- Checking and Money Market Accounts
- Research Tools
- Expert Advice
- Automatic Rebalancing
- Fractional Shares
- Order Control and Trading Window
- M1 Finance vs. Vanguard – Summary and Conclusion
How to buy Vanguard funds in Belgium
Investing in index funds, also known as passive investing, is a tried and tested method of increasing your wealth. It is based on the observation that rather than selecting individual stocks and trying to buy and sell at the right time, it is usually more profitable to invest in the stock market as a whole. This is done through a type of investment called an index fund.
The index is like a sack of shares where the rules are very clear which stocks are accounted for and how much you get from each company. The most famous index is the S&P 500, which includes the 500 largest American companies weighted by market capitalization. In Belgium, the main index is BEL 20, which includes the top 20 companies in the country. The index fund invests in companies driven by the index rules.
For most people, passive investing is preferred over an active style of investing such as collecting stocks. The reason is simple: higher profits. Indeed, due to technological advances in recent decades, financial markets have become so efficient that it is extremely difficult to have an advantage over all other investors in the world. Even professional investors face difficulties: research from the European financial regulator shows that the most actively managed funds offered by traditional banks and investment firms do not always win over passive funds. So, you will most likely get a higher return in the long run by investing in index funds such as those offered by Vanguard.
The appeal of Vanguard funds
John Bogle, founder of Vanguard, launched the world’s first index fund in 1975. Since then, the company has grown to become one of the largest investment firms in the world with trillions of dollars invested.
One of the reasons for their great reputation is that the company has always remained true to its core belief in passive investing. By growing and taking advantage of economies of scale, it consistently focuses on lowering the price for its customers, rather than making higher profits. As a result, their index funds are among the cheapest on the market.
And fortunately for us, some of their funds are now also available in Belgium through the selection of ETFs!
Alright, I’m sure. I want to buy Vanguard funds. How do I do this in Belgium?
Indeed, the table below shows that indeed, investors who bought and held from August 2001 to the present, as opposed to those who only held on for a decade, received 7.3% of the annual return for the entire 20 years – which is what young investors now expect.
Where You Can Buy Vanguard Funds (Besides Vanguard)
Due to the popularity of Vanguard mutual funds and ETFs, some large brokerage firms now sell their index funds and ETFs in addition to their own. However, because these companies are also direct competitors of Vanguard, the number of Vanguard funds they offer is often limited. It is also more expensive. For example, you can buy Vanguard’s flagship index fund, the Vanguard 500 Index (VFIAX), through Fidelity, but you’ll pay a transaction fee to get it that way. Fidelity charges a fee because the Fidelity 500 Index (FXAIX) is a competitive fund with identical positions. It is not in Fidelity’s interest to allow investors to easily buy competitor’s funds without additional costs or fees.
The largest broker with the most Vanguard funds available to investors is TD Ameritrade which has complex commissions and various fees from Vanguard funds.
If you buy Vanguard funds directly from Vanguard, you will not incur these additional costs.
Pros and Cons of Buying Vanguard Funds through Other Brokerages
Buying Vanguard funds from other mutual fund companies or brokerage firms is the same as buying any mutual funds or ETFs from a competitor. Overall, the advantages are in the convenience, while the disadvantages are in the fees.
Convenience: Buying from one brokerage house allows you to build your entire portfolio in one company.
easier Tracking: Minimizing the number of accounts you have makes it easier to keep track of your assets.
Diversification: Brokerage firms and fund companies have different strengths. For example, Vanguard is great at indexing but doesn’t have many actively managed funds.
Cost: Paying a transaction fee every time you buy a mutual fund, or a commission every time you buy shares in an ETF reduces your net return. It also beats Vanguard’s main goal of buying funds – low spend!
Limited Choice: While you may find Vanguard funds at other brokerage firms, they likely won’t offer all Vanguard funds.
Masz pytania dotyczące pieniędzy. Bankrate ma odpowiedzi. Nasi eksperci pomagają Ci opanować Twoje pieniądze od ponad czterech dekad. Nieustannie staramy się zapewniać konsumentom fachowe porady i narzędzia potrzebne do odniesienia sukcesu przez całą finansową podróż życia.
Best index funds for January 2022
Poniższa lista zawiera fundusze indeksowe z różnych firm śledzących różnorodne indeksy o szerokim zakresie, a także niektóre z najtańszych funduszy obracających się na rynkach publicznych. Jeśli chodzi o fundusze indeksowe, takie jak te, jednym z najważniejszych czynników całkowitego zwrotu jest koszt. W zestawie znajdują się trzy fundusze inwestycyjne i siedem ETF-ów:
1. Fidelity ZERO Large Cap Index (FNILX)
The Fidelity ZERO Large Cap Index investment fund is part of the investment firm’s entry into investment funds without a cost index, hence its nickname ZERO. The fund does not officially track the S&P 500 index – technically it is in line with the Fidelity US Large Cap Index – but the difference is academic. The real difference is that investor-friendly Fidelity doesn’t have to pay a license fee to use the S&P name, keeping the costs down for investors.
Spending ratio: 0% This means every $ 10,000 invested will cost you
Why are index funds so popular?
Major index funds are popular for a number of reasons. These funds offer a good return over time, are diversified and represent a relatively low-risk way of investing in equities.
- Attractive Rates of Return – As with all stocks, major indices will fluctuate. But over time, the indices have delivered solid returns, such as the long-term S&P 500 record of around 10 percent per year. This does not mean that index funds make money every year, but for long periods these have been average returns.
- Diversification – Investors like index funds because they offer immediate diversification. With one purchase, investors can own a wide range of companies. One share of an S&P 500-based index fund provides an interest in hundreds of companies, while a Nasdaq-100 fund share provides exposure to approximately 100 companies.
- Lower Risk – Because they are diversified, investing in an index fund carries less risk than owning a few single stocks. This does not mean that you cannot lose money or that it is as safe as CDs, for example, but the index will usually fluctuate much less than individual stocks.
- Low cost – Index funds can charge very low fees for these benefits, with a low cost ratio. For larger funds, you can pay anywhere from $ 3 to $ 10 per year for each $ 10,000 invested. In fact, one fund (listed above) does not charge any spending ratio. When it comes to index funds, cost is one of the most important factors in your total return.
While some funds, such as S&P 500 or Nasdaq-100 index funds, allow you to own companies in a variety of industries, other funds only have a specific industry, country, and even style of investing (e.g., dividend stocks).
2. Shelton NASDAQ-100 Index Direct (NASDX)
The Shelton Nasdaq-100 Index Direct ETF tracks the performance of the largest non-financial companies in the Nasdaq-100 Index, which is primarily technology-based. This trust fund began operating in 2000 and has performed well over the past five and ten years.
Spending ratio: 0.5% This means that every $ 10,000 invested would cost $ 50 a year.
3. Invesco QQQ Trust ETF (QQQ)
The Invesco QQQ Trust ETF is another index fund that tracks the performance of the largest non-financial companies in the Nasdaq-100 index. This ETF started trading in 1999 and is managed by Invesco, the funds giant. According to Lipper, the fund is the most successful large-cap fund in terms of total return over the 15-year period to September 2021.
Spending ratio: 0.2% This means that for every $ 10,000 invested, it would cost $ 20 per year.
4. Vanguard S&P 500 ETF (VOO)
As the name suggests, the Vanguard S&P 500 follows the S&P 500 index and is one of the largest funds in the market with hundreds of billions in fund. This ETF started trading in 2010 and is backed by Vanguard, one of the powerhouses of the fund industry.
Spending ratio: 0.03% This means that for every $ 10,000 invested, it would cost $ 3 per year.
5. SPDR S&P 500 ETF Trust (SPY)
The SPDR S&P 500 ETF is the grandfather of an ETF that was founded in 1993. He helped kickstart the ETF investment wave that has become so popular today. With hundreds of billions in the fund, it is one of the most popular ETFs. The fund is sponsored by State Street Global Advisors – another heavyweight in the industry – and tracks the S&P 500 index.
Spending ratio: 0.09% This means that every $ 10,000 invested would cost $ 9 per year.
6. Vanguard Russell 2000 ETF (VTWO)
The Vanguard Russell 2000 ETF tracks the Russell 2000 Index, a collection of some 2,000 of the smallest listed companies in the United States. This ETF started trading in 2010 and is a Vanguard fund, so its focus is on keeping costs low for investors.
Spending ratio: 0.10% This means that for every $ 10,000 invested, it would cost $ 10 per year.
7 iShares Core S&P 500 ETF (IVV)
IShares Core S&P 500 ETF is a fund sponsored by one of the largest fund companies, BlackRock. This iShares fund is one of the largest ETFs and tracks the S&P 500 index. Founded in 2000, this fund is another longtime trader to closely follow the index over time.
How to invest in an index fund in 3 easy steps
It’s surprisingly easy to invest in an index fund, but you want to know what you’re investing in, not just buy random funds that you don’t know much about.
1. Research and analyze index funds
The first step is to find what you want to invest in. While the S&P 500 index fund is the most popular index fund, they also exist for a variety of industries, countries and even investment styles. So you need to consider what exactly you want to invest in and why it might have the opportunity:
- Location: Take into account the geographic location of the investment. A broad index such as the S&P 500 or Nasdaq-100 includes US stocks, while other index funds may focus on a narrower location (France) or an equally broad one (Asia-Pacific).
- Business: In which industry is the index fund investing in? Is it investing in pharmaceutical companies producing new drugs, or maybe in technology companies? Some funds specialize in certain industries and avoid others.
- Market Opportunity: What is the Opportunity of an Index Fund? Is the fund buying pharmaceutical companies because they are making another hit drug or because milk cows are paying dividends? Some mutual funds invest in high yielding stocks, while others want high yielding stocks.
You’ll want to see exactly what the fund is investing in in order to have some idea of what you really own. Sometimes labels on an index fund can be misleading. However, you can check your index holdings to see exactly what’s in the fund.
2. Decide which index fund to buy
Once you’ve found a fund you like, you can look at other factors that can make it a good fit for your wallet. The fund’s expenses are huge factors that can earn – or cost – tens of thousands of dollars over time.
- Expenses: Compare the expenses of each fund you are considering. Sometimes a fund based on a similar index may charge 20 times more than another.
- Taxes: For some legal reasons, mutual funds appear to be less tax efficient than ETFs. At the end of the year, many mutual funds pay taxed capital gains distribution, while ETFs do not.
- Minimum Investment Amounts: Many mutual funds have a minimum investment amount for the first purchase, often several thousand dollars. In contrast, many ETFs do not have this rule, and your broker may even allow you to buy fractional shares for as little as a few dollars.
3. Purchase your index fund
After you’ve decided which fund fits your portfolio, it’s time for the easiest part – actually purchasing the fund. You can buy directly from an mutual fund company or through a broker. But it’s usually easier to buy a trust through a broker. And if you are buying an ETF you have to go through your broker.
Between those two lows, the price of the VFIAX share peaked at $ 140.62 in July 2007, an increase of 15.4% from the 2000 starting price. But investors who bought in 2000 were still waiting for 11 6% loss.
Is it Possible to Avoid Trading Commissions on S&P500 ETFs (VOO and SPY)?
Yes, if you want to enter your average dollar cost into the S & P500 index, you can open an account with a “commission free” broker such as Robinhood.
Of course, Robinhood makes its money in other ways, such as by charging monthly fees for access to margin etc, but if you are strictly interested only in investing in an index fund and want to generate average costs over time without paying a dime in trading commissions, you can do so with Robinhood app.
At Robinhood, as with every broker outside of Vanguard, the two main options for investing in the S & P500 are:
- SPY Emission Fund.
- VOO stock exchange fund (created by Vanguard).
Either SPY or VOO are great. In the long run, VOO actually slightly outperforms SPY, although this may vary depending on market conditions. But for the most part, their performance is practically identical.
You can use the Robinhood app to follow Buffett’s advice to buy SPY or VOO – FOR FREE!
How to Buy S&P500 Index Fund For Free with Robinhood in < 10 minutes
I was able to download the app, link my bank account, transfer funds, and take some of the funds that were available for trading to purchase the SPY Index Fund – all in less than 10 minutes.
Here are the steps to follow:
- Visit Robinhood.com or download the Robinhood mobile app for iOS or the Robinhood mobile app for Android.
- Fund your Account – You can do this really easily on the mobile app by simply linking your bank account by logging in with your bank details (for example, I was able to link my Chase account to my Robinhood account).
- Transfer money
- After the transfer, a certain percentage (maybe 15%?) Will be eligible for immediate trading. The rest will be available after the funds are settled in a few days.
- Start investing with any available means.
- Type in the search bar “SPY” or “VOO” – or one.
- Enter how many shares you want to order – you may need to calculate this. Take the dollar amount ($) you want to invest and divide it by the price of that bar.
- If the price of SPY is $ 200 and you want to invest 400,000, then $ 400,000 / $ 200 = 5 shares
- In the “Quantity” field enter “5” – for the “SPY” ticker and click Buy.
Since there is no commission, you don’t need to take this into account when calculating.
The Robinhood app looks nice – though not great for charting. Still, if you just want to invest in SPY / VOO and don’t care about charts or anything else, it gets the job done with decent design interfaces.
You followed Buffett’s investment advice to buy an index fund!
But there’s a second part of Buffett’s advice – which is about averaging dollar costs over time.
This part is a bit more difficult when you buy SPY or VOO with the broker of your choice.
But if inflation persists and the Fed is forced to raise rates, that could change. And if rates go up and investors move away from stocks in favor of fixed income products that deliver a rate of return that keeps up with inflation, the dividends paid out by the S&P 500 will not do much to improve the miserable results investors may be experiencing.
Vanguard International Explorer Fund
- Fund category: Foreign Small / Medium Growth
- Assets under management: 3,500.8 billion
- Efficiency: 1.0%
- Spending ratio: 0.39%
Of course, the huge list of multinationals may not ultimately provide much diversification. After all, Nestle is as dependent on US consumer tastes as many other domestic food companies. So why not take a more qualitative approach to your international investments rather than just picking up big foreign stocks?
This is what the Vanguard International Explorer Fund (VINEX, $ 22.46) does. An actively managed portfolio of around 530 foreign companies is more strategic than simply investing in large multinationals with recognizable names. For example, leading stake holders include Dutch semiconductor company ASM International NV (ASMIY) and Japanese pharmaceutical company Nippon Shinyaku – two companies that most American investors may not have heard of, but which nevertheless significantly surpassed the S&P 500 in 2021.
Moreover, many of Vanguard International Explorer’s resources are not readily available to the typical domestic investor. This is the real value of VINEX compared to a typical former US index fund that focuses on major multinationals.
If you are looking for true overseas growth potential, VINEX is probably one of the best Vanguard mutual funds for you.
Vanguard Dividend Growth Fund
- Fund Category: Big Mix
- Assets under management: $ 51.2 billion
- Efficiency: 1.5%
- Spending ratio: 0.26%
The Vanguard Dividend Growth Fund (VDIGX, $ 37.40) emphasizes stability and income growth in a simple and cost effective way.
How simple? The fund currently consists of over 40 stocks, with companies like healthcare giant Johnson & Johnson (JNJ), fast food icon McDonald’s (MCD) and insurer UnitedHealth Group (UNH) topping the list.
Manager Donald Kilbride’s mission is to reach high-quality, large-cap companies that have the potential (and usually existing practice) to raise dividends. But profitability itself is not important – hence the 1.5% current profitability, while slightly better than the 1.3% profitability of the S&P 500, is not a game changer.
It’s worth noting that while these firmly entrenched stocks are more stable than the typical growth-oriented tech firm that does not pay dividends, this stability can cause investors to leave profits on the table when things are going well on Wall Street. Example: Even taking dividends into account, VDIGX underperformed S&P in 2021.
But if stability and income growth are important to you, VDIGX is one of the best Vanguard mutual funds you can buy. Morningstar notes that the fund offers extremely low risk compared to its large blend counterparts.
Kenneth Chavis IV, CFP®, provides guidance to business owners, artists, professional athletes, and medical professionals on augmenting and preserving their wealth.
What Past Buyers Were Able to Buy and Hold?
One thing I have learned from reading the news posted on the Boglehead investment forum over the past eight years is that investors who have bought and held broad market indices such as the VOO over these essential decades are almost always investors who started investing into individual actions.
This fact is often overlooked, especially as investors are more likely to tell young investors: “Don’t invest in individual stocks.” But they miss how much they learned about stocks and their behavior in the years they invested in those particular stocks.
Yes, they might have learned – as I did by analyzing their performance after several years of buying individual stocks – that their stock picking returns were close enough to returns from an S&P 500 fund or ETF like VOO to question whether or not it was worth taking the time to research these individual resources.
But when these savvy investors threw themselves into the towel and started buying index funds, they knew what stocks were, how earnings performance influenced the movement of those stocks, how economic factors influenced their prices, how media hysteria and financial news channels exaggerated the threats to the stocks their portfolios in their endless eyeball hunt and how investment fads came and went changed the structure of the S&P 500 and what stocks drove the market both up and down.
Investors who buy get rich in fast-paced stocks that have accumulated lessons learned that will help them understand why a broad-market index such as the S&P 500 will improve after its top positions push up prices by traders who ignore basics, but eventually they move on to some new bright and shiny thing, leaving a stockpile of previous momentum licking wounds.
In short, when these investors buy a VOO, they know what they have and have a realistic idea of how an ETF such as a VOO will behave. They don’t invest 100% of their investments in stocks. They know that times are going to be lean and that they can actually be very lean. They also know that it is at these worst times in the market that a dollar invested will likely provide the greatest returns for patient investors, so it’s important to keep a “dry powder” with which to trade in the lowest markets.
So what does that tell us? It tells us that there is no shortcut to investing wisely, no matter what the person is investing in. Investors are best able to buy an indexed product when they know what they are buying, understand what stocks are in their ETF, and what their likelihood is to perform in the next four or five years, even if those stocks are packaged as ETFs or a trust fund.
So there’s no way around it. I’m going to make it clear to my young relative that yes, they should invest in VOO – but only money that they can afford to be left alone for 20 years. And the best way to invest is to invest slowly and carefully – not investing a large sum right away, but increasing from month to month. And in doing so, they must commit to taking time, though it may seem difficult, to learn the basics of investing: how markets work, how stock prices relate to a company’s earnings, how VOO invests, and how they can expect it to respond to different kind of economic shocks.
Below is a very brief summary of the advice I will be giving.
TL;DR Advice for Young People Investing in VOO
1. Before buying a VOO, any ETF should understand the basic investing concepts necessary to understand what you will be buying. The time you spend will be worth hundreds of thousands of dollars to you over the next decades. You may even discover that investing is anything but boring.
- Find out what it means when an ETF “follows an index” and how the index to which it follows is constructed.
- Find out what market capitalization means and how it affects how much of each stock you buy for a dollar when you buy an ETF worth one dollar.
- Find out why the relationship between a company’s price and earnings matters and what terms such as P / E, earnings growth rate and ROE mean.
- Find out what is behind the terminology used to describe equity investments. Some words have very specific meanings in relation to actions that differ from what they mean in ordinary conversation. Among the most important are ‘Growth’, ‘Value’, ‘Cash Flow’, ‘Momentum’, ‘Mem’ and ‘Sector. Invest small amounts at once, even if you have large amounts to invest
2. If you are investing a large amount of cash saved, invest a small portion each month to reduce the likelihood that you will invest all of your money at a market peak followed by a long downturn, such as the one that began in January 2000. Invest slowly gives time to observe market behavior and handle periodic market turbulences more comfortably.
- The larger the amount you need to invest, the longer the period you should invest.
- Never invest money in stocks that you may have to spend over the next decade to cover emergencies, prolonged unemployment, a devastating diagnosis, or a natural disaster. You don’t want to withdraw large amounts of your invested money from the market in a time like fall 2008 or late March 2020.
3.Always keep at least a third of the funds you have to invest in some form of fixed income, be it a money market fund, CDs, or bond fund, but only buy bond funds after you are familiar with how bond prices are responding to changes interest rates. Having a fixed income pillow gives you the “dry powder” you need to buy more stocks when the market crashes and other investors panic. It also protects against panic.
4. If you are investing money in a taxable account, learn what a tax loss recovery is. Selling your VOO at a loss after a severe market downturn and immediately buying an indexed product that follows another index with similar performance like Vanguard Total Stock Market (VTI) can provide you with losses that you can use to write off thousands of dollars in future profits. This reduces some pain in the event of large drops in VOO.
However, as is almost always the case with Vanguard, the company doesn’t tell us how these bases are calculated, so it’s hard to tell if it just averaged the P / E ratios of 510 shares held in different amounts or used a limit weighting in to obtain the P / E ratio.
M1 Finance vs. Vanguard – Extra Features
Let’s look at the differences between M1 Finance and Vanguard in terms of a few specific features.
Checking and Money Market Accounts
Vanguard does not provide access to an integrated checking account with FDIC insurance like M1 Finance through M1 Spend. With the premium M1 Plus option, you can earn interest and cashback on this checking account. On the other hand, Vanguard offers a money market fund that cannot be obtained from M1 Finance.
Neither M1 Finance nor Vanguard offer solid charting and analysis tools. The research tools on both are fairly simple – stock and ETF screeners, technical indicators etc. Again, no platform is made for day trading.
Vanguard offers a personal advisor if your account value exceeds $ 500,000 for a fee of 0.30% of your invested balance. Expert Pies by M1 Finance are available to anyone at any time. You can also use M1 to invest in a “lazy wallet” and balance it automatically.
Vanguard is also not taking advantage of the famous M1 “dynamic rebalancing” which strategically allocates new deposits to maintain target portfolio allocations. For example, if your portfolio has a stock / bond ratio of 60/40 and after 6 months your stock position was underperforming than the bond side, the allocation might have drifted to 50/50, which required manual rebalancing to get back to 60/40 with a traditional broker such as Vanguard. M1 Finance does this for you by targeting new deposits where needed to keep your target allocation on track.
Vanguard also does not offer fractional shares for stocks and ETFs as M1 Finance does. Fractional shares is a feature that allows every penny to work for you. For example, if Apple stocks are priced at $ 300 per share but you only have $ 100, you can’t buy any Apple from a traditional broker like Vanguard. With M1 Finance, you can still buy a fraction of that $ 300 a share. Specifically in this case, for $ 100, you are buying exactly 1/3 of the share of Apple stock. This is especially useful for investors who still want a diversified equity portfolio but do not have a lot of capital to invest. It also prevents unnecessary accumulation of cash in your account without investing. Vanguard offers fractional shares for mutual funds.
Order Control and Trading Window
Vanguard has the typical order control and all-day trading window you’d expect from a traditional broker. Built with passive, long-term buy-and-hold investing in mind, M1 Finance does not offer dedicated order control and only uses one trading window per day. The premium M1 membership, M1 Plus, gives you access to a second trading window in the afternoon.
M1 Finance vs. Vanguard – Summary and Conclusion
- Both M1 Finance and Vanguard offer commission-free transactions with low or no fees.
- Vanguard has several account types other than M1 Finance, notably Solo 401 (k), SIMPLE IRA, and 529.
- M1 Finance offers most ETFs and individual stocks. Vanguard offers ETFs, single stocks, own mutual funds and option contracts.
- Judging by the number of complaints about Vanguard’s customer service in recent years, I believe customer service should be better with the M1.
- M1 Finance offers much lower margin rates than Vanguard and the M1 loan can be used for anything you want.
- Vanguard has a slightly more clunky, confusing UI that would be more suitable for seasoned investors and traders. M1 Finance has a beautifully simple and intuitive interface.
- Both M1 and Vanguard do not have a minimum deposit requirement. Vanguard Mutual Funds require a minimum investment of $ 3,000.
- M1 Finance offers some additional benefits that Vanguard does not have: optional integrated checking account and debit card, dynamic balancing and fractional shares.
- Vanguard has the typical order control and all-day trading window you would expect. M1 does not offer dedicated order control and only uses one trading window per day.
- M1 is also probably better if you want to implement a “lazy portfolio” and balance them automatically.
I think M1 Finance is slightly ahead of Vanguard for the average retail investor for the reasons outlined above. M1 Finance is great for both beginners and seasoned long-term investors who want complete wallet customization, a modern, intuitive interface and mobile app, access to low-cost margin, optional integrated clearing account, fractional shares and dynamic balancing. M1 is not a good choice for those who need order control and, like Vanguard, is not intended for day traders.
If you’re sure you need access to mutual funds, option contracts and order checks, or you need i401 (k), SIMPLE IRA, or 529 accounts, choose Vanguard.
Actually, I’ve talked to people who use both – Vanguard for their set and forget retirement accounts in trusts and M1 for a taxable account to access an extremely cheap margin. Vanguard is also one of the brokerage houses where M1 Finance sees transfers most often:
M1 Finance is currently on a promotion through March 31, 2022, offering a $ 30 bonus on a taxable brokerage account with more than 400,000 credit within 2 weeks of opening. Details can be found here. The more you deposit, the bigger the bonus:
They also currently have a transfer bonus promotion until February 18, 2022 up to $ 5,000 when transferring an existing account from another brokerage house as detailed below: