- I will personally send you $20 through PayPal.
If Vanguard was a real person,
then I would have married her today.
She's cute, she's smart, she's funny,
she's always looking out for my best interest,
and she's cheap.
But of course, the good kind of cheap.
The highest quality of cheap, if that makes sense.
Now that I think about it,
this reminds me of a girl that I dated in the past
that broke up with me.
Ugh, I love that girl, I mean, Vanguard.
For all of the beautiful things
that I have to say about Vanguard,
they actually have a little bit of a problem.
And it's honestly a problem across the whole industry,
so I don't necessarily wanna single out Vanguard here.
And the problem is that
there are so many freaking funds to invest in.
How in the heck are you supposed to know what to choose?
It is so annoying.
Don't worry, Uncle Jarrad came to the rescue.
I did all of the heavy lifting for you
and went through every single stinking one of these funds,
so you don't have to.
Because I think you're great and I like you that much.
If I had to show you with my hands how much I liked you,
it would be like this much, that's a lot.
In this video, I'm gonna give you
the best Vanguard index funds out there.
I'm specifically gonna be talking about the ETF versions,
as opposed to the Admiral Shares,
which are sometimes referred to as mutual funds.
Hey, I'm Jarrad with an A, and on this channel,
we like to talk about all things
p-p-personal finance and investing.
Just for clarification,
the ETF version and the Admiral Share mutual fund version
hold the exact same investments.
The only difference is that an ETF can be traded
at any point in time while the Stock Market is open.
The Admiral Shares cannot.
They're only traded at the end of the day
once the stock market is closed for that day.
So, for example,
if it's 10 a.m. and I click the buy button
to purchase the ETF of index A,
then my purchase will go through right then and there.
On the other hand,
if it's 10 a.m. and I click the buy button
to purchase the Admiral Share version of index fund A,
then my purchase will not go through
until the market closes that day.
The reason that I like the ETF version of everything
is that the barrier to entry is extremely low.
Meaning, that you don't need any minimum to purchase an ETF.
But, with the Admiral Shares, there's usually a minimum,
for example, $3,000.
I personally don't like waiting around
when it comes to investing the money that I have,
so sitting there with cash
until I hit that $3,000 is not appealing to me.
Let's get this out of the way right now.
Some people might say,
"Um, but Jarrad, you have to buy full shares with an ETF,
"but you don't with the Admirals Shares."
Listen here, Samantha, you'd normally be correct,
but not if you use the investment platform that I use,
which is M1 Finance.
They let you buy fractional shares of everything.
Link to open up an account with them is in the description.
Now, I wanna do something a little special for you.
If you use my specific link in the description
to open up an M1 Finance account,
then once your account hits $1,000,
I will personally send you $20 through PayPal.
Keep in mind that that link is an affiliate link
and it helps support myself and this channel
and my dog at no extra cost to you.
I'll also have playlists linked up in the description
to all of my M1 Finance videos.
As I go through this list, I wanna be extremely transparent.
So, I'll let you know if I'm personally invested
in any of these.
Quick disclaimer, I'm not an investment advisor.
I do think that you should eat a little bit better
and exercise more often and get more sleep,
but I'm not telling you what to do with your money,
and I'm definitely not telling you
to invest in any of these funds that I mention.
Just be smart and do your own research.
Before I get into it,
please Hulk smash that thumbs up button.
The first, best Vanguard index fund,
is the Vanguard S&P 500 index with a ticker symbol of VOO.
The goal of this index is to track the performance
of the S&P 500.
Now, if you're thinking,
"Um, well Jarrod, what makes the S&P 500 so special?"
Let me answer that for you.
The S&P 500 is made up of the 500 largest companies
within the United States
from a market capitalization perspective.
The market capital company can usually give you
a good indication of the size of the company.
So think of companies like Microsoft, Apple, Amazon, Google.
Now these are massive companies that generate
billions and billions of dollars in revenue
every single year.
These types of companies are also considered
large-cap companies.
Large-cap companies are looked at as very stable
because of their size.
They're less likely to go out of business tomorrow
compared to a company like a local grocery store chain
down the street from you that maybe only has two stores.
Just because these are very stable companies
does not mean that their share prices won't fall.
They of course can but they're less likely
to go from whatever price they are today
to zero dollars in a short period of time.
The S&P 500 is only made up of large-cap companies,
specifically the largest in the United States.
Because of that, your money has a very good chance
of growing over the long run.
It also comes with a super low expense ratio of .03,
which makes my heart really happy
and makes me sleep at night really well.
The price is around $250 per share right now,
which seems like a lot,
but if you are purchasing this ETF through M1 Finance,
then you're able to buy partial shares,
so you don't need the full $250+ to start investing.
And actually all of the funds that I mentioned in this video
are available to be invested through M1 Finance.
Full disclosure, I have my future car fund money
invested in VOO through M1 Finance.
Next up, may I present to you
the Vanguard Total Stock Market ETF VTI.
VTI is another good fund to buy and hold just like VOO is.
It's actually kind of the same in that
it holds the same 500 stocks that VOO does,
except VTI also holds shares
of an additional 3,075 companies,
so it's currently made up of 3,575 companies.
Hashtag Math.
The goal of the Vanguard Total Stock Market ETF,
if you couldn't tell by the name,
is to track the performance of the total stock market.
To do that, they need to invest in more than just
the 500 largest United States companies.
VTI is made up of a mixture of large-cap, mid-cap,
and small-cap companies to try to achieve this.
Because as we know,
the total stock market is made up of large, midsize,
and small companies.
In my opinion, when you invest in VTI,
you're basically investing and banking on the fact
that the United States economy will continue to grow.
At this point, the US makes up almost 24%
of the total world economy.
From 2017 to 2018, it grew by over $1 billion.
If you're investing
in the Vanguard Total Stock Market Index,
then seeing this type of thing makes you happier than,
I don't know, finding chewy sour candy
that actually tastes sour.
Side note and kinda rant,
I know sour candy because it's my favorite,
and trust me when I say that big candy companies, they lie.
When they say that their candy is actually sour,
it's not and it makes me really, really sad.
VTI is also diversified really well
among different industries, which is what you're looking for
with this type of index fund.
The expense ratio is very low at .03
which helps me sleep at night just a little bit better
and gives me very, very happy dreams.
Disclosure with this one,
I personally hold VTI within my Roth IRA
that I invest through M1 Finance.
If you wanna see my portfolio,
then I'll leave a link in the description
to my Roth IRA video where I take you into my account
and show you what I have.
Let's change things up and talk dividend indexes.
A dividend index is for people who don't feel like
going out there and picking the individual stocks
that are focused on dividend returns.
But if you still wanna get in
on a little piece of the action, then this one's for you.
The one I tend to like the best
is the Vanguard High Dividend Yield ETF VYM.
This index fund tracks the performance of stocks
that are expected to have above average dividend yields.
It has a nice low expense ratio, which we all like,
coming in at .06% or $.60 per $1,000.
Over the past year, they have consistently paid out
over 60 cents per share each quarter.
The five-year average return is about 6.98%
and the 10-year average is 11.81%.
Since the creation of this fund,
they're seeing an above average return of 6.28%.
Based on history,
the dividend distributions have consistently been
60+ cents per share over the past year.
One thing to note about dividend-paying indexes
or dividend-paying stocks for that matter,
is that if they're invested in a taxable account,
then the dividends are considered ordinary income
within the year that they're paid out.
So you'll pay taxes on those dividends.
Now if you hold these investments
within a retirement account, then the taxes are deferred
and not counted towards income in the current year.
I personally don't do any dividend-focused investing
right now so I don't have any of my money in this.
If you're someone who wants to use
the three-fund portfolio strategy,
then you may wanna hold some sort of
international fund within your investments.
The one that I like best from Vanguard
is the Vanguard Total World Stock ETF VT.
Vanguard actually offers two different international funds
but this one is gonna be more representative
of the true international fund.
The one I didn't choose only holds stocks in companies
outside the United States.
Since the US's economy is part of the world
and technically the largest,
I think that it would be silly to choose a fund
that didn't include it.
Since it includes the whole wide world,
you could see some volatility within the price.
Think about it, this fund takes into account
so many different economies that it should be expected.
US companies make up over 58% of the whole portfolio,
which makes sense, but you can also see
that it has a decent amount of money
invested in Europe and the Pacific.
The expense ratio is very low and reasonable and I like that
so you won't hear me complaining about this.
You might have caught my review video
on the crowdfunded real estate investing platform Fundrise
and thought that "Hey, this isn't for me,"
and that's okay.
Vanguard gives you a chance to still get in
on real estate investing without doing it through Fundrise
or purchasing properties on your own.
Enter in the Vanguard Real Estate ETF VNQ.
This REIT holds many different
real estate related companies.
Things like other retail REITs,
companies who provide and run thousands of cellphone towers,
which I thought was weird,
to public storage companies,
to many other kinds of REITs
that are focused on different sectors within real estate.
The larger portion of VNQ is invested
in specialized, residential, and retail REITs.
Investing in a REIT is gonna help you diversify
from stocks and bonds and this one comes in
with a low expense ratio of .12%.
You could think of VNQ like a REIT made up
of a bunch of different REITs.
If you wanna stick with Vanguard funds
that have low expense ratios,
then this is the REIT for you.
I do have a little bit of money invested in REITs
as part of my future car fund,
but I didn't end up going with Vanguard.
It's nothing against VNQ
but I instead chose to invest in a REIT
that M1 Finance curated for me.
I may only wanted to test out
the expert pie feature that they have,
and so far the performance has been absolutely great,
and I am loving it.
If you are putting together a portfolio,
then most people will wanna have some sort of bond
to be a part of the whole thing, to help smooth out the ride
when the stock market is very volatile.
Enter in the Vanguard Total Bond Market ETF BND.
The Vanguard Total Bond Market ETF BND
is gonna be a good one for you
to kind of hold that cash that you don't wanna fully expose
to the normal swings of the stock market.
Keep in mind that the goal in holding a bond
is not to necessarily make money.
Of course it's a bonus if you do,
and hopefully you do,
but it shouldn't be the only reason that you choose one.
Vanguard has two bond ETFs that I like,
but I chose BND for two main reasons.
The first is because the expense ratio is very low at .035%.
Now only choosing a fund based on its low cost
isn't what you should be doing,
but it should still be an important part
of the whole decision process.
The second reason is because this bond
is a little bit less risky.
Vanguard rates this one at a two out of five
on the risk scale.
Over 70% of the bonds that they hold
are either US government bonds, AAA or AA grade bonds.
These are all higher grade bonds,
which is a good thing for you.
I'm gonna say this again because it's important,
the point of putting a bond in your portfolio
is for the stability.
All you needed to do is to keep up with inflation
and this one specifically has been
and has the potential to continue doing so.
The one I decided not to choose
is the Vanguard Long-Term Bond ETF or BLV.
A little over 50% of the bonds it holds
is made up of US government, AAA, and AA grade bonds,
which means that they have more money invested
in riskier bonds compared to BND.
I'm not saying the bonds this ETF holds is super risky
but they are riskier than BND.
On the risk scale, it's at a three,
so it's not outrageously risky,
and another good thing is
the expense ratio is really low at .07%.
Because it's slightly riskier,
the bond index has seen higher returns because of it.
And to be honest with you,
I wouldn't say that you're an idiot
for investing in this bond.
It's just a matter of preference.
Full disclosure for the money that I have invested in bonds,
I have chosen BND and I'm investing through M1 Finance.
Let me know in the comments what you think about this list,
if you think that you would add any other ones,
or if you think that you would take off any of these.
Make sure to Hulk smash that thumbs up button
and check out the description
to more helpful personal finance and investing playlist
and resources that I've made for you.
Thanks for checking out this video.
I'll see you in the next one, friends.
Adios!