Summary
I have been reading a really excellent book call “The Simple Path the Wealth” by J L Collins (https://amzn.to/2U1y8S0). And it really has gotten my wheels turning on how I could better approach my investing journey.
I have been using Betterment as a way to invest in various funds, but I’ve realized that the Vanguard VTSAX – Vanguard Total Stock Market Index Fund (https://bit.ly/3qjhWaJ), is a really great fund that encompassed about 3,700 US businesses that is self-cleansing by removing the failed companies in the stock market from the fund over time. It has a great history of good performance that is low maintenance from an investor’s perspective and has low fees (0.04% which is quite low as I understand it). I talk about why I have decided to move my money from Betterment into Vanguard, and why I am done playing the individual stock game via Robinhood (mostly done at least lol). Check it out and let me know what you think! I would love to hear feedback on what you do or do not agree with from my conclusions and on my new strategy moving forward.
I also get into my plans to start moving a bit into staking with crypto. Still very fresh and new to this whole idea too, so that will be interesting and fun to explore and discover.
I of course am not a financial advisor and am simply on a path of learning and wealth building. Let’s do it together!
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Transcription
Phil Salter 0:00
All right, welcome to no better time. I’m Phil Salter, and this is one of my quick dive episodes. But this is another one of my update episodes as well. It’s been a while I’m starting to feel like man, have I been learning anything really new that I can share about an all any updates on my plan for investing and what I’ve been doing to build wealth. And some really cool things have happened. When I was at my reunion, it was really exciting. My brother in law was talking to me about and he’d actually been listening to some episodes, particularly cryptocurrency episode and some other ones. And it actually resonated with him. And he said, like, he’s thinking differently. And he’s thinking, How can I start being more active in my wealth building process and preparing to build more passive income he got hit, I can see the excitement in his eyes. And he said he was looking at the world differently. And to me, that’s, that was a biggest honor to know that my brother in law, Ernesto was inspired by what I’m doing here. For me that was so validating and exciting to think that’s why I’m doing this, like, that’s exactly what I want to happen. It’s helping me so much, but to know that it’s also helping others just so great. I’ve been reading this book, The simple path to wealth by jL Collins, and it’s so good. I’m about halfway through. Over the last few days, I’ve been reading it pretty aggressively at night, because I’m trying to finish it before the end of the month. As of now, it’s the 23rd of June. So I have like a week to finish this thing, which I’ll do easily because this thing’s a really good read. But man, it’s opened my eyes to think differently. So this, jL Collins has a very, very straightforward process for building wealth. You just invest in the stock market, in, in these in a mutual fund, but specifically, this Vanguard fund, he’s a big fan of Vanguard, and explain some reasons why he’s not paid by them. They don’t. But he just loves them. And it’s been good to him over the years. And the way Vanguard was built, it’s, it’s a at cost it they operate at cost. So meaning they’re not trying to get a profit with their fees into the people who own who invest through Vanguard basically owned Vanguard, right. So it’s kind of like, I may be wrong in this. But you know, if you think like a credit union, it’s owned by the people, by the customers, right? So basically, Vanguard has been set up to be an at cost business so that whatever fees you pay are going to be lower than other places because they just want to cover their operating costs and so that they don’t have to necessarily charge extra then give the money back to you. So then what there’s tax implications with that as well, I think. But anyways, Vanguard is really awesome because of this specific fund called the VTS a x, which stands for the vanguard total stock market, index fund or something like this, but it’s ve t as in Tom, SA x. And he’s all about this font. He’s saying I would when you’re in when you’re in a wealth building mode 100% if you feel like you want to be this aggressive, he’s like, I put 100% into there. And eventually, as you start to, like, get closer to retirement, you might start doing a mix of bonds and things. But I feel like I’m in a wealth building process. And so I looked at it and I was like, well, I’ve been using betterment, and which was a good thing for me, because it got me started. It got me going. But I always had this feeling like maybe betterments not the Well, first of all, let me say I’m not a financial advisor. And so whatever I say is just things I’m kind of figuring out for myself, and I’m learning as I go. So take that for what it is. But I realized at some point, I could see myself maybe moving from betterment. Anyways, I looked in the bedroom, and I said, Well, I want to be in this specific Vanguard fund. It has a $3,000 minimum investment, I think to get into it, but I have enough in betterment that if I were to transfer it over, I could actually, you know, meet that guy over that. That minimum. that’s beside the point other than just say, hey, that that’s something to consider with this particular fund. In Vanguard, they have a bunch of funds, actually. But um, I was looking at betterment, like, well, what am I investing in, in betterment? And it turns out betterman is using a bunch of different Vanguard funds a bunch of different ones, like some international ones, and, you know, US stocks, and it’s all these different ones. I’m like, Well, I like Vanguard,
but I want to have more control one to a specific fund. And then I realized to look into it, well betterment using it and I’m double paying fees. So basically this Vanguard vt sa x fund, it’s only like a point oh 5% like fee which is like really low compared to other ones are like point two, five or like or higher. It’s very low maintenance. You just set it and forget it. If you’re This is for someone who’s going to put money in the stock market bet on the market in the long run and be able to weather the storms because there will be dips in the stock market goes up and down. But over time, you look at these charts, the stock market as a whole always rises. There’s dips to that as it rises higher than before, dips for COVID, right? It’s gonna, it’s gonna rise higher than before. And so that’s Hey, Alexa, stop. Alright, so anyways, that’s what I’m thinking for long term growth bet on the stock market and don’t get scared when things dip because they do, there will always be crashes and they’re always rebound higher. If you know past performance is not proof or guaranteed future success, but I think we have enough here to say, hey, if the stock market crashes, then there’s really no good investments, right? So it’s like, then we’re then if there’s an apocalypse, then like, it doesn’t matter what we have invested in, it’s we there’s bigger problems, right? So I realized, why am I gonna be picked not using the funds I want plus, I’m double paying fees. And this stuff adds up quickly, or not quickly. But over time, the less any fraction of a percent, you can remove in your fees to invest. It pays off in 1000s of dollars over the years. And so I’ve decided I’m going to transfer everything over to Vanguard, it’s a little bit of a process, you have to like fill out paperwork and actually mail them something physically, to take money from my betterment holdings account into Vanguard. But I’m going to do it. And then another thing I realized is, why am I if I’m betting on the stock market, as in the long run as a whole, not individual companies, what’s really cool about this VTS, ax fun is it self cleansing. So as companies aren’t performing up to the standard, it’s like 3700 companies are in this fund. So very broad. But if companies fail, they get knocked out, you’re no longer invest in those anymore. And that rolls over into other things. And so it’s self cleansing. So it’s like companies that are within this certain criteria, or in this fund. It’s also some people say, what about international investing? It’s very international. Like, there’s these companies, even though they’re US companies, they are international, like Microsoft, Apple, these companies are really actually international companies. So you’re kind of getting that it kind of covers that international thing. And so it’s a really cool fund. And it’s a good bet. And again, I’m not a financial adviser, but this is what I’m going to try. And so then I started thinking, well, then if I’m doing that, because I’ve been I don’t know, if you’ve if you’ve been listening, I’ve been doing I’ve been putting $30 a week into Robin Hood, which is a way to buy individual stocks, it’s a brokerage
account, I guess you could say that, that you invest in stocks. And I’ve been I put, like, I’ve done these things. I’ve injected like $1,000 for this thing here, or this or that. But over time, it’s kind of grown to a certain amount of money. But then I was looking at the numbers. And it’s like, besides one stock, that’s like totally speculative. That’s actually doing really well right now, but who knows where it’s gonna go? I’m actually like, breaking even or losing a little bit of money as a whole. And across all these different stocks I’m buying. I’m like, okay, it’s all just a crapshoot. Why am I putting all this energy into something that when I look at even my betterment account, which isn’t even that as good as it could be, if I get this other fund, I, in my opinion, it’s doing better. And I’m not when I when I put in there, I just walk away, and I don’t have to think about it, I’m not checking it all the time, you know. And so I realized, I’m going to sell all these stocks, and maybe eat a couple, you know, a little bit of money out of it, but and I’m going to take this money and do something else with it either put it in Vanguard, but I’m also considering I had a cryptocurrency episode with crypto for Robin, and defy fry. And they were talking about aetherium. And staking. And I’m looking into that, because I care about after selling the stocks, I have, let’s say, a certain amount of money that I could see. And they say you need to have at least $1,000 to make it worth doing because there are fees associated with getting into aetherium. And into like, going into protocols to stake this money, which I’m still trying to learn how this works. But you do something called Coinbase as a place you would go to actually buy the Ethereum and then you could take that your Coinbase wallet and put it into something like shared stake and steak it and they have these kind of a these annual returns which you know, fluctuate but are definitely better than putting it in some like savings account. So anyways, that’s what I’m considering. I’ll keep you posted on that as I kind of dig into that. But I have a little over $1,000 that I could just do that after selling some of these stocks. And I want to keep it in some type of investment. I don’t want to just put it back in my bank account. I want to grow my investments and keep putting money in and versus like cutting out this early. It’s been a couple months doing the stock market thing. And it’s like the more I’m learning more realizing this is not where my energy needs to go. And so it’s been kind of fun to like make these connections and realizations and kind of adapting my plan. I’m hoping it’ll work out So that’s kind of where I’m at now. I’d love to get your feedback, there’s some things I’d love to I’m looking for people who have experience with setting up accounts for their children, kind of like college funds, where does the best place to put them that money so that you can, with the best tax implications for when you transfer this funds over to your kids. I want to start slow and maybe put $20 a month into accounts for each of my kids and grow from there. But I don’t know what kind of accounts to do, because I was just doing these random betterment like accounts just going the stock market, but I kind of like this can’t be the best way to do this. So I’m going to reach out and see if I can find someone who has experienced with this kind of thing. And if you or someone you know knows about that, please reach out to me at No Better Time podcast@gmail.com so that I can interview and talk about this because I think this is something other people might be interested in learning about. So thanks for listening. It’s just really exciting to learn these things I’m really trying to like look for to get more actual experts on these different topics. I want to learn what people want to know about around money, finances, investing, removing increasing credit, all this stuff, you know, I want to get more information and more expertise in the mix so that we can all learn together. All right, well, have a great day.
Transcribed by https://otter.ai
No Better Time 