Originally Posted by bamsphd
Given that I buy mostly index funds and treasuries at auction, what other expenses would I care about?
Originally Posted by youbet
OK. I thought that perhaps you had actually compared expenses but obviously not.
Before investing I compared the expense ratios of many different funds. Thankfully, I quickly realized that index funds were the best choice for someone who thinks like an engineer, which significantly narrowed my choices. I then ordered prospectuses, and statements of additional information for the index funds I wanted at Vanguard, Fidelity, Schwab, and others. I did not give credit for "temporarily waiving fees" because I do not want to move my money, a taxable event, after "temporary" expires. For open-ended index-based mutual funds, Vanguard was unquestionably the most cost efficient option when I did my search.
My calculations indicate that I now pay Vanguard a little over $1,000 per year in management fees on my mutual funds based on my assets and the fund expense ratios. At my asset level, Vanguard does not charge me anything to purchase treasuries at auction. So for the foreseeable future, unless I sell a treasury bond early or Vanguard changes their fee structure, the only money Vanguard will make on me is from their fund management fees. They are simply not charging me any other fees.
Besides my individual account with Vanguard, I have a Fidelity account for my 401(k) and ESPP. Until I part ways with my current employer that account will remain open. Because the 401(k) is held through Fidelity, but actually invested in Vanguard Institutional
index funds, I might keep the 401(k) around for a long time!
For those who want to see the Vanguard brokerage fee structure, use this link: https://personal.vanguard.com/us/acc...lueContent.jsp
However, in my case such fees are simply not material. The fund ER totally dominates my investment expenses.
If I was starting from scratch today with a smaller asset base, I would be tempted to use a service like Buy Stocks Online and invest your money at ShareBuilder
and purchase ETFs instead. That option was not available when I started with Vanguard. It is an option that should be seriously considered if you don't have enough assets to purchase Vanguard Admiral shares. I recommend individuals wanting to invest in equities who have less than $3,000 use ShareBuilder and Vipers. For example the new baby received $$$ from the grandparents...
As far as I know, if you want to use open-ended index-based mutual funds, Vanguard is still the clear choice. If you want to use Vanguard's funds, investing directly with Vanguard usually makes the most sense.