Today we simplified our investments. You may remember that we were contemplating making this move a while back (see here), but due to capital gains and taxes we had to wait until 2015 to avoid getting hit with a big tax bill.
Recap
We have condensed our portfolio from 6 mutual funds and an individual stock to a single mutual fund, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX). This switch will give us broader diversification, VTSAX holds every publicly traded stock in America, and it lowers our expense ratio. The new lower expense ratio of 0.05% means that if you hold $10k for a year, Vanguard only skims off $5 to keep the lights on over in Valley Forge (their headquarters). Can you imagine walking up to a stock broker and saying “Hey buddy, I’ll give you $5 to invest my money in every company in the United States”.
Investing Made Simple
We’re not trailblazers by any means. You can read more about this strategy in more depth on other blogs.
- ThirftyGal’s Money Strategy (Nice simple explanation)
- Budgets Are Sexy
- JLCollinsNH
I love the simplicity of the whole deal. Set up an automatic monthly investment and walk away. There is zero mental load associated with this plan. In fact, the less you think about it and worry about the market ups and downs the better. Fidgeting around with it is the biggest risk of losing money. So if you have 20+ years to kill time with and want to be set for retirement, consider setting up a lazy one fund portfolio.