Hi all,
I've recently set up my first brokerage account, investing $3,800 into VTSMX using Merrill Edge. They charged me $19.95 to do this. I'm planning on investing $1,600 of my paycheck (every two weeks) into this account.
However, I know BogleHeads *hate* fees and this essentially amounts to $20 / $1,600 = 1.25%!
Any way around this? I've seen what high expense ratios can do to long-term wealth so I'm very hesitant to pay this on a regular basis...
Thanks!
Automatic Investment While Avoiding Fees?
Re: Automatic Investment While Avoiding Fees?
Is it possible the commission is due to it being a mutual fund?
What is ME's commission on ETFs/stocks?
VTI is the ETF equivalent of VTSMX and may be available at lower cost.
Furthermore, DRIP (dividend reinvestment plan) automatically does not incur a charge, but if if you contribute each pay period into it, you surely will incur the cost regardless of mutual fund or ETF.
Is there no commission-free fund with Merrill that you can use instead? Ex. POMIX has ER of 0.3%, ugly but way better than what you are incurring now.
Disclaimer: I don't have an account with Merrill so defer to others who know their fee structure better.
What is ME's commission on ETFs/stocks?
VTI is the ETF equivalent of VTSMX and may be available at lower cost.
Furthermore, DRIP (dividend reinvestment plan) automatically does not incur a charge, but if if you contribute each pay period into it, you surely will incur the cost regardless of mutual fund or ETF.
Is there no commission-free fund with Merrill that you can use instead? Ex. POMIX has ER of 0.3%, ugly but way better than what you are incurring now.
Disclaimer: I don't have an account with Merrill so defer to others who know their fee structure better.
Last edited by tenkuky on Thu Jan 11, 2018 1:33 pm, edited 1 time in total.
Re: Automatic Investment While Avoiding Fees?
One needs to have a certain minimum balance to qualify for free trades at Merrill Edge. So
1. Deposit enough money to get a high enough balance to get free trades.
2. Use ETFs but ONLY if they are free trades, but there is no automatic investing with ETFs at Merrill Edge that I am aware of.
-or-
1. Switch to vanguard (and vanguard.com) if you want free trades on Vanguard products and easy automatic investing.
1. Deposit enough money to get a high enough balance to get free trades.
2. Use ETFs but ONLY if they are free trades, but there is no automatic investing with ETFs at Merrill Edge that I am aware of.
-or-
1. Switch to vanguard (and vanguard.com) if you want free trades on Vanguard products and easy automatic investing.
This signature message sponsored by sscritic: Learn to fish.Re: Automatic Investment While Avoiding Fees?
You definitely don't want to be paying that much in fees. Most brokerages have some fund family / families that you can trade mostly commission free. With fidelity you can trade iShares for free, Vanguard you can trade vanguard funds / ETFs, etc. Especially with an account made up of just a handful of index funds... you should really pay very little (or nothing) in commissions.
I would either find out which / how you can get lower cost trades at your current brokerage, or switch to another one where you'll be able to trade the funds / ETFs you want for no or low commission.
I would either find out which / how you can get lower cost trades at your current brokerage, or switch to another one where you'll be able to trade the funds / ETFs you want for no or low commission.
Re: Automatic Investment While Avoiding Fees?
If you are interested in the Vanguard index funds, why not pick Vanguard?
You can get to Admiral shares (lower cost) and no trading fees.
Sometimes I ask dumb questions.
You can get to Admiral shares (lower cost) and no trading fees.
Sometimes I ask dumb questions.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead