My grandfather used to say “If there’s one thing I hate, it’s something I don’t like.” Over the course of the last year, I’ve learned that if there’s one thing I hate, it’s paying fees. Which just so happens to be something I don’t like.

What kind of fees? Any kind of fees. In just over a year of Impersonal Finances, I’ve harped on the following types of money monsters:

• Edward Jones brokerage fees
• American Funds load fees
• Fidelity 401k fees
• Chase ATM fees

Rather than express further disdain for the existing fees in my life, I thought it worth highlighting the preferred alternative at Vanguard, which will come as no surprise to any personal finance enthusiast.

Dearest Vanguard  

Yes, this is simply an appreciation of Vanguard’s low-cost fees, and an explanation of the minimal charges that I incur in my Vanguard brokerage account. In short, Vanguard is the antidote for investing fees—the exact type of fee that usually draws my ire.

While the folks at Bogleheads and virtually every FIRE blogger have covered all the virtues of Vanguard for years now, I thought it important to spread a little more digital ink on these Impersonal pages of the internet. A handful of perturbed Googlers seem to find their way to my Edward Jones horror story and I wanted to give them a happy ending to the money slasher film they’ve co-starred in.

Vanguard’s mutual fund fee structure is spelled out on their website, but I’ll give the cliff notes below.

Account service fees – $0 with e-delivery ($20/year otherwise)

I can think of no Earthly idea why you wouldn’t go paperless with your account statements and save yourself a flat $20 annual fee, but should you refuse, the $20 account fee would still qualify as below industry average. Seriously though, just sign up for e-delivery and save them the mailing costs in exchange for a free, no-fee account.

Sign up online, opt-in to paperless delivery, and boom, you have yourself an investment account at no cost to you. No need for a brick-and-mortar visit and an awkward conversation with a salesman masquerading as an investment advisor.

Expense ratios – as low as 0.04%

Vanguard’s founder, John Bogle, is one of the great unsung heroes of the investing world and should carry more mainstream name recognition than he does. Not only is he credited with creating the first index fund, but more importantly he’s known for making these funds accessible to the average investor. But then again, what kind of an egomaniac would he have to be to name a financial institution after himself? (In fairness to Mr. Jones, they’re all egomaniacs.)  

An important component to these index funds—and another reason why these passive investments consistently outperform active management strategies over the long haul—is their miniscule expense ratios. Expense ratios massively undercut your performance over time. Since it’s a percentage-based figure, the more you have invested, the more real dollars are coming out of your account.

The difference between Admiral Shares and Investor Shares

For investments of over $10,000, investors are able to purchase Admiral Shares, which carry insanely low expense ratios to the tune of 0.04% for VTSAX (their all-encompassing total stock market fund that is favored in the personal finance space and includes a piece of more than 3,000 different companies). The Investor class of shares for this same fund (for amounts less than $10,000) is still very cheap at 0.14%. And, fear not, once your VTSMX crosses the $10k threshold, those shares will automatically switch over to VTSAX and apply the 0.1% expense ratio savings without your intervention.

While VTSAX is the aggressive all-stock approach of choice, you could also follow Ramit Sethi’s advice in I Will Teach You To Be Rich and choose a Target Date fund, especially if you’re closer to your retirement. The expense ratios for these funds, which are even more diversified with a mixture of stocks and bonds, are similarly low at around 0.15%.  

VTSAX vs. VTI

If you hop around the personal finance blogosphere, you might notice some inconsistencies between how enthusiasts such as myself refer to Vanguard’s darling fund. Some refer to VTSAX while others refer to VTI. The good news? They’re pretty much the same. VTSAX is a mutual fund and VTI is an exchange-traded fund (ETF), but both track the same index.

Technically, though, VTI charges an even smaller fee of 0.03%, and the minimum investment required is simply the price of a single share of VTI, whereas VTSMX requires at least $3,000. ETFs trade throughout the day, like stocks, while mutual funds are priced at the end of the trading day. For the purposes of a long-term buy-and-hold investor, it really doesn’t matter.

What other fees will you pay at Vanguard?

What? That’s it? An account fee that’s easily waived and a tiny expense ratio? Yep, that’s it.

There’s a reason so many finance folks sing the praises of Vanguard, and nowadays more and more brokerages offer low-cost index funds. There’s simply no reason to remain at a fee-fiend firm like Edward Jones when you can take charge of your own investments with such ease. Deposit an initial investment, set up some automatic transfers to the preferred fund in either a Roth IRA (up to $6,000) or a brokerage account, and you’ve got the cheapest, easiest investment account around.

What if you still want someone to manage your money?

OK, so you know it’s easy—but you don’t care. You simply don’t feel comfortable managing your own money, especially as those accounts grow into larger sums. Nothing to be ashamed of.

For accounts over $50,000, Vanguard does offer financial advisor services, at a cost of 0.3% of your entire portfolio. Most advisors will charge a whole percentage point (or more) of your account, so that’s a significant savings of at least 0.7% of your assets each year if you do decide that you need an investor after all. It’s still a larger bite of the investing apple than I’m willing to personally absorb, but you’re not me and I’m not you. Do what you think is best for you, not for some random blogger you stumbled upon.

Love, Impersonal Finances

A final note: Just to be abundantly clear, this is not an affiliate post and I am in no way profiting off of you or Vanguard by recommending their services. I spend a lot of time talking about some of the moronic money moves I make, so perhaps I needed my own positive reinforcement. Quite simply, moving away from Edward Jones and into Vanguard is likely to be the best financial decision I ever make.