Here’s the next installment of “My Favorite Things”
Vanguard Mutual Funds – the house that Jack (Bogle) built. Vanguard consistently has the lowest fees in the mutual fund industry. Even a small fraction of a percentage in fees can translate in tens of thousands or even hundreds of thousands of dollars difference over a lifetime of investing. While best known for ‘passive’ index funds, Vanguard also offers a number of excellent actively managed funds with low fees. Unlike most mutual fund families, Vanguard is not ‘owned’ by share holders but by its funds: ultimately by its investors. This is one reason it can keep costs so low. While I can’t vouch for it personally, Vanguard also offers a Personal Advisor Service to guide your investments. The fee is 0.3% annually with a minimum of $50,000 of assets managed, a fraction of what other financial institutions would charge.
- Cons: I am not particular fond of the website but it’s adequate. There are no walk-in offices for deposits and transactions, not even at their headquarters in suburban Philadelphia. Paper-based transactions and forms must be conveyed via mail or courier. Not all of its actively managed funds are stellar performers. See this Kiplinger’s article on Vanguard Funds to avoid.
Kiplinger’s Personal Finance – a truly worth-while go-to magazine on personal finance, particularly for those just embarking on the journey towards Frugal, Wealthy and Wise. In it, you will find cost-saving ideas and strategies that potentially could save you hundreds and even thousands of dollars. I definitely prefer it to Money magazine. Kiplinger’s is more button-down with less fluff. A great tool for becoming a savvy consumer and investor.
- Cons: Reading it year after year, a lot of topics tend to get recycled. Be objective about its investment suggestions. Personally, I am huge fan of Vanguard funds and believe that it’s the best place for most people to keep most of their investments. But the editors do have to keep the advertisers happy and, this may blur objectivity a tad.
The Economist – an erudite, insightful weekly news magazine that truly covers all corners of the globe. You will likely be scurrying to a dictionary (or google) and adding new words to your vocabulary with each issue. I particularly enjoy the quarterly Technology issues.
- Cons: It’s expensive (but worth it IMO). While the weekly online edition is available on Thursdays, the printed edition usually doesn’t show up in the mail until Monday. The editorial slant is conservative on business and government policy but liberal on social issues. And it takes a fair amount of time each week to read cover to cover.
Just a word about magazine and newspaper subscriptions in general. These are discretionary expenditures that need to be scrutinized (see earlier FW&W posts “Catch the Little Foxes” and “25 to Thrive”). If magazines, no matter how worthwhile to read, are piling up in a corner unread, you probably should cancel the subscriptions. Kiplinger’s and The Economist are the only two magazines I currently subscribe to and it’s tough just keeping up with them. A frugal alternative: read these magazines at your local library.
Microsoft Money – I guess I’m an Old School kinda guy; I use a personal finance software package released 12 years ago and has since been discontinued. But it meets my needs: to balance accounts and track expenses over time; I don’t need a bunch of bells and whistles such as real-time updates of my accounts. You can buy a Money 2004 CD on eBay for under $10 (no activation key required on the 2004 edition and it runs fine on modern computers). Believe it or not, many financial institutions still provide statement downloads in the MS Money format for importing. If not, Money 2004 can import download files in the Quicken format. This is one of the very few Microsoft products (out of two, I think) that can be whole-heartily endorsed and they don’t even sell it anymore!
I encourage you to use some sort of personal finance application, either online or as software on your PC, to keep your finances in order. If using a discontinued software product such as MS Money puts you off, check out Mint or Quicken. Yes, there will be a learning curve. And it takes time to ‘feed the beast’. But it is far easier to balance a checking account. And tracking expenses is essential for the Frugal, Wealthy and Wise.
My Favorite Things: to be continued in the next posting. I would appreciate your feedback and the sharing of your experiences with any of these products and services.
Meanwhile watch this “My Favorite Things” clip from The Sound of Music movie c. 1965.