Why I Fell in Love With Vanguard

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I've avoided Vanguard for years, but not certain why. We've made the switch to Vanguard and have fallen in love with them. Here's our experience thus far.

Have you ever had one of those moments where you wonder what you were thinking…for years?!

Well, my friends, I had one of those ultimate hand palm moments several months ago. Today, I’d like to share with you how and why I fell in love with Vanguard.

As someone who has thought himself to be a relatively good investor stock picker over the years I avoided Vanguard. I don’t know why. Maybe it was viewing Vanguard as too boring. Maybe it was because I thought they weren’t for me.

I don’t know why. But what I do know is that I finally feel like we’re doing what we should be doing for our investing. It doesn’t hurt either that Vanguard is just plain awesome and a member-owned company so you know they’re out for the best interests of their clients – not stockowners.

Why We Moved to Vanguard


There are a number of reasons why we moved to Vanguard. When I say we moved to Vanguard, I mean we moved everything.

That being said, we had a number of reasons for the move. Those were:

  • I’m too busy with our business to adequately manage our investments the way I’d like to. It has been a good 3-4 years since I’ve been able to adequately manage our investments
  • I wanted a much lazier approach to our investing
  • I wanted to significantly cut our investing fees
  • We chose them for our self-employed retirement plan – a Solo 401(k) so it made sense to move everything to them
  • I wanted a place that specializes in investing – they’re the brokerage of brokerages
  • I love their philosophy, driven by Jack Bogle
  • I wanted to know what we were paying for our investments

I’m sure there are other reasons why a move to Vanguard made sense, but these are the top reasons that come to mind. Other online brokers will encourage you to trade actively, charge crazy fees and overall not be an advocate for growing your wealth. I want to invest our money with a broker that’s the opposite of that. Vanguard epitomizes that philosophy.

In short, I’m too busy to actively manage things on my own and I want a lazy and solid approach to manage our investments. As I’ll share later, our previous approach was anything but lazy and solid.

I will also add that ever since we made the move it has been confirmed to me we made the right decision. I know I sound like a fan boy, and admittedly I am though to be clear that I am not being compensated by Vanguard or anyone else in any way for this post. I asked them several years ago if they had an affiliate advertising program and they smiled and said “No. How do you think we keep our fees so low? :-)” Still, I believe in their approach and service so much that I am happy to promote them on the basis of their value alone.

Having dealt with nearly every major online broker in my previous day job, the service we’ve received from Vanguard has been top notch. At most other brokerages you need to have millions of dollars to receive such service. We don’t have millions of dollars, yet, but they have treated us like we do.

What We Were Investing In and What We Changed


I’ve never been a terribly active trader in previous years but I was a stock picker. I’d not just pick any stock, as I usually selected each stock or ETF after thorough research. Below is what we were invested in at the time we moved to Vanguard:

  1. Vanguard Health Care ETF – VHT
  2. Vanguard Total Stock Market ETF – VTI
  3. Deutsche Bank X Trackers MSCI Japan Hedged Equity ETF – DBJP
  4. iShares Core US Aggregate Bond ETF – AGG
  5. iShares Russell Mid-Cap Growth ETF – IWP
  6. PowerShares Nasdaq Internet ETF – PNQI
  7. Schwab International Equity ETF – SCHF
  8. Consumer Discretionary Select Sector ETF – XLY
  9. Vanguard FTSE Europe ETF – VGK
  10. SPDR Series Trust S&P Dividend ETF – SDY
  11. iShares Core S&P Small-Cap ETF – IJR
  12. Vanguard FTSE Emerging Markets ETF – VWO
  13. Vanguard Small-Cap Growth ETF – VBK
  14. Powershares QQQ ETF – QQQ
  15. Dr. Pepper Snapple Group – DPS
  16. Alibaba Group Holding LTD – BABA
  17. Altria Group – MO
  18. Berkshire Hathaway B – BRK.B
  19. Coca-Cola Company – KO
  20. FedEx Corp – FDX
  21. Ford Motor Company – F
  22. Goodyear Tire & Rubber Company – GT
  23. Microsoft – MSFT
  24. Qorvo – QRVO
  25. Southwest Airlines – LUV
  26. Visa – V
  27. Walt Disney – DIS
  28. Apple – AAPL
  29. Apple (call) – AAPL
  30. Freeport McMoran – FCX
  31. Starwood Property Trust – STWD
  32. Starwood Hotels & Resorts Worldwide – HOT
  33. Whole Foods Market – WFM
  34. Blackstone Group – BX
  35. AT&T – T
  36. Intel Corp – INTC
  37. Lowes Companies – LOW
  38. BlackBerry Limited (straddle) – BBRY


Wow, 38 different stocks, ETFs and other holdings! That’s just plain nuts and way too much for me to actively manage effectively or efficiently. Upon our move to Vanguard we sold everything but Disney (I’m not a Disney fan but Mrs. Frugal Rules is and I know when to listen to her) and BRK.B as it’s really like a mutual fund anyway and I love having the ability to go to the annual convention each year.

For the sake of laziness and ridiculously low fees we whittled everything else down to a small handful of holdings. We are now invested in the following:

Vanguard Total Stock Market Investor Shares – VTSMX

Vanguard Short-Term Investment Grade Investor Shares – VFSTX

Vanguard FTSE All-World Ex-US Small-Cap Index Shares – VFSVX

To be clear the above is in our Solo 401(k), with an 85% – 10% – 5% allocation. It’s also important to point out that Vanguard does not allow for Admiral shares to be held in Solo 401(k)s. Though, with expense ratios of .17%, .20% and .37% respectively I’m not too terribly concerned with those fees. In our other accounts, Roths, SEPs and Rollover 401(k)s, we’re in the Admiral shares available to us with a very similar composition as our Solo 401(k) plan.

I know some would consider such a heavily tipped approach to the entire U.S. stock market (VTSMX/VTSAX hold close to 3,700 stocks) risky. In some instances that would be accurate. I’m of the age however where I’m comfortable with the associated risk. We do have a relatively small exposure to the bond market as well as an international fund. To be fair, many of the companies in the Total Stock Market funds are multinational so it balances out a fair bit of that.

Please don’t take our investments as guidance. It’s not. I’m not at all trying to tell you what to do with your money. I just want to provide a real-life example of managing money so you can make the best decision based on your circumstances.

I've avoided Vanguard for years, but not certain why. We've made the switch to Vanguard and have fallen in love with them. Here's our experience thus far.

Investing Should Be Simple


Many out there like to make investing in the stock market more difficult than it has to be. They turn it into chasing gains, listening to the talking heads and thinking short-term. We can all be guilty of that at times, myself included, but that’ll only make investing more difficult than it needs to be.

That is why we moved to Vanguard. We like their focus on long-term growth, not short-term spurts. They know investing is much more about blocking and tackling drills than big plays. They know indexing is generally the best way to go for many investors. Heck, if Warren Buffett says it’s good enough for him, then it should be good enough for most of us. 🙂

I know Vanguard may not be for everyone. I know some hate it because it’s so “boring.” My argument is investing should be boring, but that’s just me. 😉 Vanguard admittedly isn’t for everyone, but it has been a great experience for us thus far and is seriously making me wonder what took us so long to make the move. But, after taking 38 holdings across a number of accounts down to essentially five holdings I’m a fan.

I know this was a pretty long post – an investing one at that. 🙂 That being said, I hope this helps you think through your own investing situation. I will be the first to say that there is no cookie cutter solution to investing in stocks. What works for me won’t for you and vice versa. Hopefully this gives you an idea of another approach to consider, regardless of whether or not it’s with someone like Vanguard.


Do you love/hate Vanguard and why? How many stocks/ETFs do you have and how boring is your investing? When was the last time customer service surprised you in a good way? Would you have done something differently than us?

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.


  • Natalie @ Financegirl says:

    I’m a fan of Vanguard, in general, too. I personally use TradeKing. And my clients at my day job use Schwab or Fidelity. But I’ve heard only good things about Vanguard.

    • John Schmoll says:

      I don’t think you can really go wrong between Schwab, Fidelity or Vanguard – all 3 are great to deal with.

      • Jim Wang says:

        And as your assets grow at Vanguard, you get more benefits. At “just” $500k you get $2 trades and access to a CFP for questions, so while it’s not a dedicated financial adviser it’s someone you can ask questions whenever you want. At $1mm, you get a CFP, 25 free trades a year, then discounted trades.

        You know Vanguard is cheap when you read news articles about how they’re being investigated for charging too little in fees!

        • John says:

          I, too, saw where Vanguard is being investigated for NOT charging enough! It seems beyond belief that it’s necessary for our court system to spend time trying to RAISE our investment costs! Clearly Vanguard is looking out for their investors best interests. If that puts them at a competitive advantage, so be it. Other providers can lower their fees to compete!


          • John Schmoll says:

            Exactly John. Much of the old guard doesn’t see money flowing out to somewhere investors can do much of the same for much less.

            While they can lower their fees, I don’t see much of it happening. Too many other of the online brokers are publicly traded so they want to make as much money as they can.

        • John Schmoll says:

          Yep, exactly Jim. You have to pay through the nose for stuff like that at some other brokerages.

          Ha! I read an article a few days ago that was talking about the net inflows Vanguard is seeing and a good bit of it is coming at the expense of the traditional managers. Suffice it to say, the old guard doesn’t care for it.

  • DC @ Young Adult Money says:

    Love this approach, John! Individual investing can be fun for people but honestly there is so much value in simplifying. We own very few mutual funds and only two individual stocks. It’s nice not having to think about what we are invested in all the time or making moves that end up being more about timing than long-term value. Great post, John!

    • John Schmoll says:

      Agreed DC. I love to spend more time on our investing, but the fact of the matter is I simply don’t have the time. I’m looking to simplify things in my life, thus it makes sense to follow that with investing as well.

  • says:

    John – I fell in love with vanguard about 15 years ago, and started following Vanguard through boglehead forums. I agree with you, that Jack Bogle, is da man! He makes it cool to invest in the market, with low fees, and little to no emotion in your investment choices!

  • Emily @ JohnJaneDoe says:

    I have been with Vanguard for a couple of years, but only recently moved my investments out of other mutual funds and into Vanguard funds. Crazy, huh? I’ve seen the light, though, and am sold on Vanguard’s fund philosophy and low fees.

  • Holly@ClubThrifty says:

    We have almost all of our investments in 5 or 6 Vanguard funds. I love the low fees and the simplicity of it all. I also take the “lazy approach” to investing and don’t want to try to time or play the market too much. We just shovel money in every month and call it a day.

  • Brian @DebtDiscipline says:

    I moved over to Vanguard earlier this year. I wanted to keep things simply and keep fees low. I’m currently invested in three different funds. So far so good.

  • Kalie @ Pretend to Be Poor says:

    We also switched to Vanguard. It’s so nice that the fees are low. Thanks for sharing your strategy!

  • Hannah says:

    Any reason that you chose to completely ditch bonds? Is it due to current yields, or is that a permananet choice? Since bonds have historically run counter-cyclical to the US stock market, they provide a nice buffer in downward troughs that make it a little easier to be disciplined in a rebalancing strategy.

    • John Schmoll says:

      We didn’t completely ditch bonds – I think the name of the fund might be a little misleading. The VFSTX is a short-term bond fund. We’re currently sitting at 10% of our portfolio in that, or something very similar, in our other accounts. That being said, current yields are keeping me from going more of a 80/20 approach with equities vs. bonds.

      • Chuck says:

        Other may call themselves fiduciaries, yet with Vanguard it very obvious. The client is number one over fees and Commission. Boring yes and a lot very things keep me up at night but not our investments!

  • Tonya@Budget and the Beach says:

    I’m actually planning on moving my retirement money from Raymond James, where I’m paying a buttload on fees, to fidelity or vanguard, but everything I’m reading points to Vanguard. Good to know someone else is a big fan.

    • John Schmoll says:

      Good call on moving away from Raymond James Tonya – especially to get away from those fees. You can’t go wrong with Fidelity either – we seriously considered them and are a solid choice. Vanguard had a slight edge for what we were looking for, but came very close to picking Fidelity.

  • Robin McDaniel says:

    I’ve been meaning to switch everything over to Vanguard myself. I feel like I’m behind everyone else!

    • John Schmoll says:

      I can relate Robin – I felt like we were behind everyone else as well. I’m glad to finally be doing what we should be finally. ๐Ÿ™‚

  • Syed says:

    Great investing piece John. Vanguard has been great I’ve been using them for my Roth IRA for years now and you’re right their service is excellent. Even though stock picking can be fun, most full time stock pickers will not be able to beat a Vanguard mutual fund over the long term.

    And I know flattery gets me nowhere, but I will add you to the list of smart people I know that are with Vanguard. It seems smarter people tend to gravitate to Vanguard. But that’s just my observation ๐Ÿ™‚

    • John Schmoll says:

      Thanks Syed! Agreed, their service is top notch. Having dealt with pretty much every major brokerage out there I’ve been floored by their service.

      Ha ha, I like being considered smarter. ๐Ÿ™‚

  • Stefanie @ The Broke and Beautiful Life says:

    I’ve been with Vanguard since I opened my first brokerage account at 24 – love!

  • Kim says:

    I am sooo lazy when it comes to investing and use Vanguard for almost everything except my little bit with Motif and Betterment. I’ve had my retirement accounts with them for over 15 years and no complaints at all.

  • Michelle says:

    I love Vanguard. I love how simple it is to use, how I can be more of a “lazy” investor, and more.

  • LeisureFreak Tommy says:

    I like what I see at Vanguard and all of the testimonial praise is impressive, We have some low fee Fidelity funds and I use a financial planner for a chunk of my investments who has done very well for me even with the extra fees. I have a SEPP 72t assisting with funding my early retirement but when that ends in 2 years I will most likely follow you and all of the others to Vanguard to keep things simple and low cost.

    • John Schmoll says:

      I’ve always been relatively impressed with Fidelity, generally speaking but I can see how having an advisor as well will only add to your costs. I didn’t want to be a believer at first, but they’re top notch. That being said, most really can’t touch Vanguard when it comes to fees, service or philosophy.

  • Mr. Groovy says:

    Great points, John. Boring is my middle name and we’re with Vanguard, too. We look forward to rolling over the 401K & 403B when we ditch the jobs next year.

  • Gary R says:

    I have always loved Vanguard. In addition to the “boring” moniker, I think what keeps people from investing with them, and I know from personal experience, is the minimum of $3000 and the maintenance fees, (yes, even on Roth IRAs), if your balance is below a certain amount. I do have some retirement 403b funds with them and recommend them highly.

    • John Schmoll says:

      That’s an excellent point Gary! I know that’s something that will hold back some, especially if they don’t want/like the index fund approach.

  • Andrew@LivingRichCheaply says:

    Love Vanguard and their low fees. I’m pretty boring with my investing strategy. I used to invest in individual stocks and tried chasing hot stocks and mutual funds but after a lot of failure, learned my lesson. Yes, I still buy some individual stocks because it’s human nature to try to hit a home run but low cost Vanguard funds make up the majority of my portfolio.

    • John Schmoll says:

      I was similar – I like to invest in individual stocks but as time goes on the return began to deteriorate as I didn’t have the time to actively manage it. I’d rather go the lazy, low-cost approach and be further ahead.

  • Shannon @ Financially Blonde says:

    I always hearing what people love about Vanguard because other than low fees, I just can’t stand Vanguard. If you want to invest in something other than Vanguard funds or ETFs you get nickeled and dimed all over the place. Every time I have used the site with clients, we have had technical difficulties and I find the site difficult to navigate. Customer service has also been a challenge with some customer accounts and it makes you feel like they don’t put money into anything. That being said, the low fees are kind of difficult to not love especially with expected returns only between 6-8% you need to watch fees all over the place.

    • John Schmoll says:

      That’s a fair point Shannon. I like the ease of it, which doesn’t hurt as that’s what I’m looking for, but know that others will avoid them due to that. Sorry to hear about the customer service issues – I know that can be found anywhere, though I’ve had a great experience overall.

  • John says:

    I’ve been with Vanguard for about 10 years now. No regrets, it was a great move. The fees are super low. Personally I’ve found their customer service to be fine. The web site is pretty basic, but it meets my needs. I’d rather have a basic website and lower fees! I try to only invest once a month, and rebalance quarterly, so I’m not on their site often.

    Great posts. Congratulations on narrowing down your holdings. 38 holdings is way too much to keep track of!


    • John Schmoll says:

      That’s a good point about the basic-ness of the Vanguard site. I find the Fidelity site to be more robust – which is a large part of why I was considering them, but at the end of the day I’m not spending any real time on the site. I just need something simple to do our investing – much like yourself.

      Thanks – I don’t know how I managed them…in actuality I really didn’t. ๐Ÿ˜‰

  • Adam @ says:

    I’ve restructured my parents portfolio to look a lot like that. 2-3 Vanguard funds. Simple and straight-forward.

  • Jim Wang says:

    I’ve been a Vanguard users for years, at the urging of my Dad. Been a fan ever since, though I do have holdings at TradeKing because it made financial sense at the time.

    It’s always good to simplify though, I have about 20 dividend stocks in TradeKing that I purchased in the lows of the Great Recession, but the rest of my holdings are at VG in funds. It’s just easier to manage when it’s all i none place.

  • Scott says:

    Vanguard is the most affordable option except for the Thrift Savings Plan (TSP). Both offer low cost options, which is the real benefit because more of your money is invested and not being used for fees.

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