This Cool Feature of Vanguard-Managed Funds Maximizes Your Investment Returns
How Vanguard aligns its interests with yours.

Your investment account is your personal concern.
Your broker? Couldn’t care less. He earns money by charging commissions when you buy and sell.
He wants you to buy and sell to make money.
No broker or asset management company has their interests aligned with yours.
Except for one.
Vanguard.
It’s your best friend if you invest for the long term.
Building Wealth
J. L. Collins gives a how-to-get-wealthy formula in his book The Simple Path To Wealth:
"Spend less than you earn - Invest the surplus - Avoid debt.” - J. L. Collins
Investing is key.
Is it simple? Yes.
Easy? No.
If you’re like me, you’re afraid of market crashes. You don’t want your wealth wiped out like New York in Independence Day.
Don’t invest in individual stocks. Chances are you don’t have enough information about a company to see it turn into a household name.
My friend Victor bought Amazon in 2014, saw it plunge 25%, sold it, and watched it soar beyond the buy price.
Selecting stocks is like navigating a stormy sea without a compass.
Go with index funds but don’t judge your performance on a monthly or even yearly basis.
Even Warren Buffett (net worth north of $100 billion) says:
“Do not take yearly results too seriously. Instead, focus on four- or five-year averages.”
Here’s the good news.
The stock market is rigged to the upside. Most of the time. And when it’s not, it’s the only time the government turns into your best friend.
Remember pandemic stimulus checks? They stopped the bear market in a couple of weeks.
The Securities and Exchange Commission introduced a 10% rule - you can’t short a stock on a day it’s lost more than 10%.
It comes down to the following.
The US has the largest middle class in the world. Most of its wealth is in the stock market. The US will become a poor country if the market crashes and never recovers. How likely is this?
There’s always something to improve in the economy. I needed half a day to meet a colleague in the city in 2007. Now, I use Zoom for 30 minutes to talk with the same colleague out of my office.
Investing in low-cost index funds will smooth your investing journey and provide a good return on your investments in the long run.
This is where Vanguard comes in.
Imagine you buy an ETF. You pay for the operational costs of the fund and for a profit that goes to the owners of the company.
Vanguard is different.
The founder of Vanguard, John C. Bogle, shifted the ownership of his company to the funds it operates. You own your funds with Vanguard and through them, Vanguard itself.
At Vanguard, you are an investor and an owner at the same time.
This translates into an extremely low expense ratio, 0,04%, for Vanguard funds.
Compare it with 0,20% for QQQ (tracks the Nasdaq-100 index, managed by Invesco) and 0,095% for SPY (tracks the S&P 500 index, managed by State Street Corp.).
The low expense ratio benefits Vanguard’s fund owners. While 0,20% doesn’t seem like a lot, it will make you way less money than 0,04% over a few decades (a typical investment time horizon).
Very little can go wrong. Your assets are not invested in Vanguard but in Vanguard funds and through them, in each individual stock in the funds.
Even if Vanguard goes bankrupt (how probable is this?), the underlying investments will remain unaffected.
The Bottom Line
Mr. Bogle was a genius who structured Vanguard in a way that it’s actually interested in helping you make money.
You own Vanguard if you invest in its funds. The company charges a low commission for managing your investments. Which means you’ll maximize your returns.
Investing with Vanguard is perhaps the best way to make money long-term in the stock market.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
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That's pretty cool of Vanguard! I just set up on Questrade a short while ago, haha, since I somehow had trouble creating a Vanguard account. (I told you about them saying I had to be a US resident.) But perhaps I was looking at the wrong webpage or something. We'll have to see.