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Started By
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Should I pay a transaction fee to buy Vanguard Muni fund?
Posted on 6/23/15 at 3:56 pm
Posted on 6/23/15 at 3:56 pm
Would you buy a muni fund if you had to pay a fee? Our accounts are with Schwab but I want to purchase Vanguard's Intermediate Muni Bond fund (VWIUX/VWITX). The expense ratio of these funds are much cheaper than the alternatives. The way I see it, this one time charge is unfortunate, but lower expenses will make up for it in a very short time.
1
Posted on 6/23/15 at 4:01 pm to NBR_Exile
I don't know. The fact that it would take all of 5 minutes to open a vanguard account and avoid it would make me do that instead.
Posted on 6/23/15 at 4:04 pm to Teddy Ruxpin
I'm pretty obsessive regarding our accounts. I despise having money all over the place. I guess I would be paying for my compulsion.
Posted on 6/23/15 at 9:00 pm to NBR_Exile
quote:
I'm pretty obsessive regarding our accounts. I despise having money all over the place. I guess I would be paying for my compulsion.
I am the same way. I have to use TD Ameritrade for my work Simple IRA so I have my roth and taxable there as well. I use ETF's when I can because most of the Vanguard are commission free.
Posted on 6/23/15 at 10:09 pm to NBR_Exile
quote:
I'm pretty obsessive regarding our accounts. I despise having money all over the place. I guess I would be paying for my compulsion.
I find it funny that you want the Vanguard fund to get the low fees, then immediately are willing to tax yourself on every transaction.
Is this rational?
EDIT: Another benefit of setting up a brokerage account directly with Vanguard is that once you have the initial fund purchase, you can buy as little as $100 at a time (to the best of my recollection) with no transaction costs. Automatic investing in the fund over time becomes MUCH easier.
This post was edited on 6/23/15 at 10:13 pm
Posted on 6/24/15 at 12:29 am to TigerstuckinMS
There really isn't a minimum limit for automatic investing for vanguard.
Posted on 6/24/15 at 5:18 am to TigerstuckinMS
quote:
I find it funny that you want the Vanguard fund to get the low fees, then immediately are willing to tax yourself on every transaction.
Is this rational?
I know it is somewhat irrational but here is my reasoning:
This will be a one-time purchase. The fee is $76 dollars. For a number of reasons my asset allocation is off and I need re-balance our portfolio. We recently sold our primary residence so we have too much cash on hand.
The expense ratio difference between say, TWTIX and VWTIX is .27. By going with the Vanguard fund, I would save hundreds of dollars a year in expenses. The $76 dollar fee would be made up in short order.
I asked this question so others could check my logic and math.
Posted on 6/24/15 at 9:41 am to NBR_Exile
I spent more than $76 typing this response. I hope that answers your question.
Posted on 6/24/15 at 9:57 am to iknowmorethanyou
quote:
I spent more than $76 typing this response. I hope that answers your question.
Totally understand and agree. In this day of really cheap commissions, I found it hard to go back to the old days of paying for the transaction.
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