What the F**k is Vanguard?

If you read or listen to anything related to personal finance, you have heard of Vanguard Funds. But WTF are Vanguard Funds and why are they so popular? Vanguard and its founder, John Bogle, are investing legends and for a good reason. Bogle founded the first index fund, beloved of hands-off investors everywhere, in 1975. That Vanguard Fund, the Vanguard 500 Index Fund now has more than $500 billion under management. What is Vanguard? Vanguard is an investment advisor with more than $5.1 trillion under management. Vanguard is also the leading provider of mutual funds and second largest provider of ETFs. The founder, John Bogle, has long been a champion of offering low cost, low effort investing to the average person. Why are Vanguard fund fees so low? Because Vanguard is not owned by outside stockholders as most investment management companies are. Outside investors want returns, and those returns come in the form of fees charged to customers. Vanguard has no outside investors. The company is owned by its funds, and the funds are owned by their shareholders, which is everyone who invests with Vanguard. This structure is why Vanguard funds have low fees. Those low fees mean more money in the pockets of Vanguard’s investors/owners. Why Fees Matter When you see a fee of 2% (if you pay attention to investing fees at all), you think that sounds pretty good! Two percent is nothing. And that’s true. A 2% interest rate on your savings account is nothing. Getting 2% off when you buy a dress is nothing. But a 2% investing fee isn’t nothing. It’s something; it’s a lot of something. And that something is the money you have to live on in retirement. If you had $100,000 invested earning 6% for 25 years and paid no fees, your $100,000 would become $430,000. If you paid a 2% fee in that same scenario, your $100,000 would become a mere $260,000. That seemingly small 2% just obliterated nearly 40% of your retirement savings! Why We Love Vanguard Funds We love Vanguard, and we aren’t alone. “According to a recent Ha