JL Collins

One of my little secrets, which I have now mentioned on several podcasts but not, I think, yet here on the blog, is that I actually achieved financial independence picking individual stocks and, by extension, actively managed funds run by folks picking individual stocks. and I had learned there is no secret sauce and even the best analysts in the business, people who live and breathe just a few stocks in one or two industries, struggle to predict successfully which stocks will outperform. While I don’t remember the exact number of tons, or the number of outstanding shares, it was a simple bit of basic math to calculate how much gold there was for each share. At one point, in our firm’s morning meeting, the senior partner opened by asking, “Anyone care to guess what the most widely held stock in this firm is?” Since the SEC requires folks in that business to disclose all their holdings and trades, he already knew the answer: Mariah International.

With a DAF, on the other hand, you could contribute and deduct the full $50,000 in the first year and then distribute it in your planned $10,000 chunks over the next five years. If you have a business, rather than making a charitable donation and listing it on your Schedule A, buy a sponsorship with that charity and deduct it as a business expense. For the last few years, we have been donors to Adopt a Native Elder through our donor advised fund with Vanguard: You, in turn, always send us a lovely note of thanks. Not only is Adopt-a-Native-Elder incredibly responsible and effective in using the money folks like us contribute, the need is great.

However, transaction costs might be lower for mutual funds if you can obtain these through a broker specialised in index investing. If you follow these steps you will have identified which fund(s) you are willing to throw your cash at (on a monthly basis?), have found the best and cheapest broker because costs matter hugely and you will have accepted the fact that there is a dividend leakage (or have tried to work your way around it…or have given up on investing after all…don’t!). Check out and compare transaction fees, currency exchange fees (very important in this case!), custody fees, membership fees, and service fees. If you’ve found yourself a broker specialised in investing in dollars, they’ll probably know how to handle this.

Here is the most important thing to understand: VBTLX and BND both hold exactly the same Total Bond Market Index portfolio This is also true of VTSAX and VTI, and every other mutual fund and its ETF companion. With BND, at the current price of $87.20, you’d buy 57 shares for $4970.40 or 58 shares for $5057.60. Mutual funds trade at the end of the day and you get the price of the shares at the market’s close. —“With the not-so-new FATCA (Foreign Tax Compliance Act part of the 2010 HIRE Act), many U.S. mutual fund companies have introduced policies preventing their funds from being purchased by non-U.S. residents, including Americans abroad.