Best new brokerage account bonuses- Offer Vanguard??

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Zero85
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Best new brokerage account bonuses- Offer Vanguard??

Post by Zero85 »

Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
If there are no transactions fees, and the broker provides access to VUSXX, you will do better somewhere else. Every time I looked at it, It never paid to open an account just to hold cash. A vanguard brokerage to hold cash has always been unbeatable. If you are going to use the broker for ETFs and other services like a CMA, maybe....
bondsr4me
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by bondsr4me »

retiringwhen wrote: Wed Apr 03, 2019 7:01 am
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
If there are no transactions fees, and the broker provides access to VUSXX, you will do better somewhere else. Every time I looked at it, It never paid to open an account just to hold cash. A vanguard brokerage to hold cash has always been unbeatable. If you are going to use the broker for ETFs and other services like a CMA, maybe....
+1...agree.
Also, VG has plenty of FREE etf's for you to invest in.
The big complaint I see on the forum is VG's (I have 3 accounts with VG) customer service and IT.
But, I have seen complaints about Fidelity (I have an account there) and Schwab (I have an account there).
I got a cash bonus from Schwab when I moved money from VG to CS; eventually I moved most of the account back to VG.
Fidelity gave me a bunch of free trades last summer when I moved cash to them. I have to wait I believe 9 months before I can move the money back out.
I believe TDA (I have a very small account there) offers cash rewards card, but I'm not sure about the qualifications.
All things considered, I think you need to look at other aspects than just cash bonuses; ie: Customer Service; the type of investing you want to do; the IT platform; and a very important factor (to me anyway) is the company REPUTATION. This is highly important to me. This is IMHO where VG wins out.
Good Luck with your choice.
Last edited by bondsr4me on Wed Apr 03, 2019 7:21 am, edited 1 time in total.
stan1
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by stan1 »

Also remember if this is a taxable account you should get a 1099 on the bonus (reducing the value of the bonus by the amount of tax owed at your federal and state marginal tax rates).
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Wiggums
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Wiggums »

stan1 wrote: Wed Apr 03, 2019 7:21 am Also remember if this is a taxable account you should get a 1099 on the bonus (reducing the value of the bonus by the amount of tax owed at your federal and state marginal tax rates).
I think you time has a value also.
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RickBoglehead
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by RickBoglehead »

Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Right. Because getting incentives is the only criteria that should be used in determining where to invest your money... :shock:

Vanguard has a different business model than the other companies. You might want to understand it. If they paid you a dime to move your assets to them, the other shareholders would be up in arms.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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ruralavalon
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by ruralavalon »

Welcome to the forum :) .
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Vanguard offers by far the largest selection of low expense mutual funds and ETFs offered anywhere. Low expenses are the best predictor of future performance and returns.

Don't make bonuses or other incentives a primary criteria in deciding on where to invest.

Any company offering a bonus or other incentive has carefully calculated that on average they will make up for that cost by charging their customers enough in some fashion to pay for the incentive.

Vanguard Treasury Money Market Fund (VUSXX) has a current SEC Yield = 2.36%, and a compound return = 2.39%. Do the firms which offer transfer bonuses offer a treasury money market fund with that yield or return?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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Zero85
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Zero85 »

ruralavalon wrote: Wed Apr 03, 2019 10:13 am Welcome to the forum :) .
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Vanguard offers by far the largest selection of low expense mutual funds and ETFs offered anywhere. Low expenses are the best predictor of future performance and returns.

Don't make bonuses or other incentives a primary criteria in deciding on where to invest.

Any company offering a bonus or other incentive has carefully calculated that on average they will make up for that cost by charging their customers enough in some fashion to pay for the incentive.

Vanguard Treasury Money Market Fund (VUSXX) has a current SEC Yield = 2.36%, and a compound return = 2.39%. Do the firms which offer transfer bonuses offer a treasury money market fund with that yield or return?
See, that’s the question. Do other firms give me the ability to buy VUSXX without adding additional fees?
1) I live in a high tax state, so the VUSXX is best to avoid paying state taxes.
2) Currently this money resides in a Credit Union MMA earning 2.00% annually. In addition, I would have to pay federal and state taxes. Plus it’s yield is lower than VUSXX.
3) I’m looking to buy the fund, and just let it grow riskfree. Essentially it’s 80% of my savings. The other 20% will be left in my credit union.
4) I don’t want to trade or buy anything with risk. Not looking for up and down roller coasters. Too many people these days think the stock market only goes in one direction, up.
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Based on you description above, just open an account at vanguard. It will take 15 minutes and you have the money earning a significant premium over you credit union and you are done. You could spend days looking for a bonus that turns out be not so bonusy for you...


I have tried in the past and it never paid off. Those bonuses are to attract traders mostly or folks who are looking for a new banking platform... both cases, they make tons on the back in explicit or implicit fees unless you are very very careful.
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RickBoglehead
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by RickBoglehead »

Zero85 wrote: Wed Apr 03, 2019 11:54 am
See, that’s the question. Do other firms give me the ability to buy VUSXX without adding additional fees?
1) I live in a high tax state, so the VUSXX is best to avoid paying state taxes.
2) Currently this money resides in a Credit Union MMA earning 2.00% annually. In addition, I would have to pay federal and state taxes. Plus it’s yield is lower than VUSXX.
3) I’m looking to buy the fund, and just let it grow riskfree. Essentially it’s 80% of my savings. The other 20% will be left in my credit union.
4) I don’t want to trade or buy anything with risk. Not looking for up and down roller coasters. Too many people these days think the stock market only goes in one direction, up.
"Grow risk free". At 2%, or just over 2%, you're going to take roughly 30 years to double your money. Hopefully you have other accounts like a 401k for your retirement, because this approach will barely beat inflation.
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Gufomel
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Gufomel »

Zero85 wrote: Wed Apr 03, 2019 11:54 am
ruralavalon wrote: Wed Apr 03, 2019 10:13 am Welcome to the forum :) .
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Vanguard offers by far the largest selection of low expense mutual funds and ETFs offered anywhere. Low expenses are the best predictor of future performance and returns.

Don't make bonuses or other incentives a primary criteria in deciding on where to invest.

Any company offering a bonus or other incentive has carefully calculated that on average they will make up for that cost by charging their customers enough in some fashion to pay for the incentive.

Vanguard Treasury Money Market Fund (VUSXX) has a current SEC Yield = 2.36%, and a compound return = 2.39%. Do the firms which offer transfer bonuses offer a treasury money market fund with that yield or return?
See, that’s the question. Do other firms give me the ability to buy VUSXX without adding additional fees?
1) I live in a high tax state, so the VUSXX is best to avoid paying state taxes.
2) Currently this money resides in a Credit Union MMA earning 2.00% annually. In addition, I would have to pay federal and state taxes. Plus it’s yield is lower than VUSXX.
3) I’m looking to buy the fund, and just let it grow riskfree. Essentially it’s 80% of my savings. The other 20% will be left in my credit union.
4) I don’t want to trade or buy anything with risk. Not looking for up and down roller coasters. Too many people these days think the stock market only goes in one direction, up.
What are your financial goals? Because unless your pure annual savings with 0 growth above inflation is sufficient to achieve your goals, then having all your savings earning 2.00% is very “risky” in the sense that you will never meet your goals.
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Zero85
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Zero85 »

Gufomel wrote: Wed Apr 03, 2019 12:17 pm
Zero85 wrote: Wed Apr 03, 2019 11:54 am
ruralavalon wrote: Wed Apr 03, 2019 10:13 am Welcome to the forum :) .
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Vanguard offers by far the largest selection of low expense mutual funds and ETFs offered anywhere. Low expenses are the best predictor of future performance and returns.

Don't make bonuses or other incentives a primary criteria in deciding on where to invest.

Any company offering a bonus or other incentive has carefully calculated that on average they will make up for that cost by charging their customers enough in some fashion to pay for the incentive.

Vanguard Treasury Money Market Fund (VUSXX) has a current SEC Yield = 2.36%, and a compound return = 2.39%. Do the firms which offer transfer bonuses offer a treasury money market fund with that yield or return?
See, that’s the question. Do other firms give me the ability to buy VUSXX without adding additional fees?
1) I live in a high tax state, so the VUSXX is best to avoid paying state taxes.
2) Currently this money resides in a Credit Union MMA earning 2.00% annually. In addition, I would have to pay federal and state taxes. Plus it’s yield is lower than VUSXX.
3) I’m looking to buy the fund, and just let it grow riskfree. Essentially it’s 80% of my savings. The other 20% will be left in my credit union.
4) I don’t want to trade or buy anything with risk. Not looking for up and down roller coasters. Too many people these days think the stock market only goes in one direction, up.
What are your financial goals? Because unless your pure annual savings with 0 growth above inflation is sufficient to achieve your goals, then having all your savings earning 2.00% is very “risky” in the sense that you will never meet your goals.
My primary purpose is to preserve cash, obtain cash flow of roughly $300 monthly through interest rate yield in conjunction with avoiding any drawdowns, and shielding cash through tax exempt gains thus avoiding high state taxes. Secondly, if a broker reward me with a nice bonus for just parking my cash, rather than one who doesn’t do anything, I’d opt for getting something for nothing.

I don’t want monthly $2k-$5k swings, hence why I’m avoiding stocks. I like VUSXX because I’ll clear $3k a year on pure RISKFREE interest yield due to Treasuries.

I’m not interested in the discussion of inflation on this topic. There’s a reason why but I’ll save for a later period of time. I just want to get thoughts upon this topic for now.
mega317
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by mega317 »

It's hard to give advice in a vacuum. My opinion is if all of your assets are going to be in cash you need all the sign up bonuses you can get. There is an epic thread related to such bonuses.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
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whodidntante
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by whodidntante »

I don't know if it is as safe as the vanguard fund, but ICSH yields more and has lower expenses. You won't pay commissions to buy it if you spend any effort avoiding commissions.
Direwolf14
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Direwolf14 »

Without further questioning your motivations, VUSXX is currently a no transaction fee fund at E*Trade. Usually NTF funds at E*Trade have a 90-day short-term redemption fee of $49.99, but I'm not sure about VUSXX since their quote page does not specifically say.
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Let's put some value on the bonuses for second. Assuming you are going to buy $150,000 of VUSXX, let's look at the bonuses available.

https://www.bankrate.com/investing/best ... t-bonuses/

Ally Invest = $300 or 0.2% return for a 6 mos. commitment.
E-trade = $300 (same as Ally)
TD Ameritrade = $300 but requires a 12 mos. lockup.
Merrill Edge = $375 or 0.25% return and requires you to make a "qualified investment", maintain balance for 90 days AND enroll in BoA Preferred Rewards.

You better not let any dividends, or other cash set in their settlement accounts at all or you'll lose that much in interest you would have gotten in a Vanguard brokerage and/or re-investing directly.

A better approach if you want bonuses is to look at the lower balances that get you higher percentage rewards (like $25K minimum that can give you a much better % return.) So start out, open and account at Vanguard and put $100K in there so you will have a safe place for the default VUSXX cash, then take the two $25K chunks and open brokerage accounts at two place and get their bonus, rinse and repeat in 6 mos. That way you can make a better return on your bonuses. you may even use Vanguard as the place to buy VUSXX and then transfer assets to the other brokerages to reduce fees.....

Now the question is, is that worth the effort to get a few extra bucks. We are looking at andannual improvement of 0.2 to 0.4% improvement on money market returns for probably about 15-20 hour work (and all the additional effort to manage multiple accounts.) Let's assume you can churn $400 a year for 20 hours work. That $20/hour. What do you get paid at your day job?

Now, if you are trader, there is more value in the bonuses, (same for stuff like the ME rewards program) but you are spending a lot of time to get there. BTW, if you account for monthly account reading and tracking my 20 hours year number is probably low by half.....
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
In my opinion, you shouldn't. That's why I don't. I'm happy to buy Vanguard products at other custodians. In my case, I prefer ETFs as those are cheap (usually free) and can be moved anywhere. I generate thousands per year in bonuses. It's also the case that fewer custodians offer bonuses, so strike while available.
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Earl Lemongrab wrote: Wed Apr 03, 2019 5:44 pm
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
In my opinion, you shouldn't. That's why I don't. I'm happy to buy Vanguard products at other custodians. In my case, I prefer ETFs as those are cheap (usually free) and can be moved anywhere. I generate thousands per year in bonuses. It's also the case that fewer custodians offer bonuses, so strike while available.
I've been toying with peeling off $25K or so of VTSAX -> VTI and shipping it around for bonuses, haven't decided if it is worth the effort yet. That makes more sense than trying to do it with cash balance.
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

retiringwhen wrote: Wed Apr 03, 2019 5:36 pm You better not let any dividends, or other cash set in their settlement accounts at all or you'll lose that much in interest you would have gotten in a Vanguard brokerage and/or re-investing directly.
That's way overblown. Even if you had $5000 sitting around in cash (why would you?) then the difference between a 2.5% sweep account and 0% would only be $125/year.

If that's a concern, then reinvestment would be sensible. Most custodian offer that for ETFs or mutual funds without fees. For taxable accounts you can link a bank account and sweep out any cash then put it where you want.
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

retiringwhen wrote: Wed Apr 03, 2019 5:46 pm I've been toying with peeling off $25K or so of VTSAX -> VTI and shipping it around for bonuses, haven't decided if it is worth the effort yet. That makes more sense than trying to do it with cash balance.
I don't have lumps of cash sitting around. Use invested assets, then you never lose anything during the transfer. If you have to keep cash, use an account with a better interest rate than typical brokerage accounts.
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Earl Lemongrab wrote: Wed Apr 03, 2019 5:49 pm
retiringwhen wrote: Wed Apr 03, 2019 5:36 pm You better not let any dividends, or other cash set in their settlement accounts at all or you'll lose that much in interest you would have gotten in a Vanguard brokerage and/or re-investing directly.
That's way overblown. Even if you had $5000 sitting around in cash (why would you?) then the difference between a 2.5% sweep account and 0% would only be $125/year.

If that's a concern, then reinvestment would be sensible. Most custodian offer that for ETFs or mutual funds without fees. For taxable accounts you can link a bank account and sweep out any cash then put it where you want.
I don't disagree with your numbers only that if you aren't careful the bonus will not be a bonus....
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

retiringwhen wrote: Wed Apr 03, 2019 5:57 pm I don't disagree with your numbers only that if you aren't careful the bonus will not be a bonus....
Sure. I think we're in "agreeance".
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Zero85
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Zero85 »

retiringwhen wrote: Wed Apr 03, 2019 5:36 pm
Zero85 wrote: Wed Apr 03, 2019 6:14 am Hello all,

I noticed plenty of excellent new brokerage account bonuses such as $300-$600 just for signing on.

I’d like to put $150,000 in the Vanguard VUSXX fund however Vanguard offers no registration bonus. Why should I stick my money in Vanguard while many other places will pay me for joining them? What other places out there can I buy the VUSXX fund while making money for registering? It makes no sense to join Vanguard, buy there fund, and get no incentives right?
Let's put some value on the bonuses for second. Assuming you are going to buy $150,000 of VUSXX, let's look at the bonuses available.

https://www.bankrate.com/investing/best ... t-bonuses/

Ally Invest = $300 or 0.2% return for a 6 mos. commitment.
E-trade = $300 (same as Ally)
TD Ameritrade = $300 but requires a 12 mos. lockup.
Merrill Edge = $375 or 0.25% return and requires you to make a "qualified investment", maintain balance for 90 days AND enroll in BoA Preferred Rewards.

You better not let any dividends, or other cash set in their settlement accounts at all or you'll lose that much in interest you would have gotten in a Vanguard brokerage and/or re-investing directly.

A better approach if you want bonuses is to look at the lower balances that get you higher percentage rewards (like $25K minimum that can give you a much better % return.) So start out, open and account at Vanguard and put $100K in there so you will have a safe place for the default VUSXX cash, then take the two $25K chunks and open brokerage accounts at two place and get their bonus, rinse and repeat in 6 mos. That way you can make a better return on your bonuses. you may even use Vanguard as the place to buy VUSXX and then transfer assets to the other brokerages to reduce fees.....

Now the question is, is that worth the effort to get a few extra bucks. We are looking at andannual improvement of 0.2 to 0.4% improvement on money market returns for probably about 15-20 hour work (and all the additional effort to manage multiple accounts.) Let's assume you can churn $400 a year for 20 hours work. That $20/hour. What do you get paid at your day job?

Now, if you are trader, there is more value in the bonuses, (same for stuff like the ME rewards program) but you are spending a lot of time to get there. BTW, if you account for monthly account reading and tracking my 20 hours year number is probably low by half.....
Thank you, very helpful and I’m grateful for that thorough breakdown. It makes sense, I’m leaning toward opening through Vanguard. I couple of hundred isn’t worth the hassle. Good point!

So I’m curious. For people with family to support, what’s the best way for preserving cash and gaining tax exempt income from a high taxing state. Currently this is my reason for the VUSXX. But I’m certainly open to better ideas. Any help is appreciated.
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

As I said in the mini-FAQ for The Final, Definitive Thread on Brokerage Transfer Bonuses calculating the return on the investment is absolutely the WRONG way to do it. You use investments so that they work as hard as ever and give you the same return as they would at Vanguard or anywhere else.

The bonus is a return for the effort you put in, which these days is minimal. Most of the custodians that have bonuses allow you to set up the transfer from their web site. All you need to do is open the account (easy) and set up the transfer (easy). If you spend more than an hour on that you're doing it wrong. In reality it shouldn't be more than half that. So even a $200 bonus in taxable still good pay for your time. And in a Roth IRA, you won't ever pay tax on the bonus, plus you just increased your Roth space, which is very valuable in itself.

I used to do $200 bonuses all the time. It's harder now because there are fewer targets these days, so I usually go for a higher-value ones.
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

Earl Lemongrab wrote: Wed Apr 03, 2019 11:36 pm As I said in the mini-FAQ for The Final, Definitive Thread on Brokerage Transfer Bonuses calculating the return on the investment is absolutely the WRONG way to do it. You use investments so that they work as hard as ever and give you the same return as they would at Vanguard or anywhere else.

The bonus is a return for the effort you put in, which these days is minimal. Most of the custodians that have bonuses allow you to set up the transfer from their web site. All you need to do is open the account (easy) and set up the transfer (easy). If you spend more than an hour on that you're doing it wrong. In reality it shouldn't be more than half that. So even a $200 bonus in taxable still good pay for your time. And in a Roth IRA, you won't ever pay tax on the bonus, plus you just increased your Roth space, which is very valuable in itself.

I used to do $200 bonuses all the time. It's harder now because there are fewer targets these days, so I usually go for a higher-value ones.
I believe you are way too sanguine about actual effort required.

Have you considered the following? All of this is fresh in my mind due to opening an IRA at Fidelity as an experiment (experiment is for two things, 1.) is the grass greener on the Fidelity side from a customer service perspective? and 2.) I decided to plunk $7,000 into FZROX to track how is does against VTSAX)

1.) Learning to navigate a new website to do simple things like find your cost-basis (I would assume 30 minutes for a curious person for the basics, not everything.)
2.) Reading the key disclosure documents? I know, most people skip, but I try to read key parts like fees. (15-20 minutes)
3.) Figuring out how to setup beneficiaries, trusted third-party, etc. (1+ hours)
4.) learning how to track the brokerages's balances in your chosen spreadsheet, quicken, mint or whatever systems (30 minutes)
4a.) additional effort every week or month to reconcile and integrate those results in your personal finance tracking process (5-7 minutes)
5.) figuring out how to unsubscribe the drivel you get from the new brokerage (constant annoyance)

This does not count the stuff I would assume you considered in your hour like setup 2FA, integration with banks/ACH, initiating the transfers and tracking the transfers, etc.

If you are not doing all of the items in 1 to 4, you are frankly not being responsible with your money. In all cases, you could get by with no problems but when those things that happen to all of us happen, they matter a lot. your avoiding a 60 minutes to setup the beneficiary, trusted person may hours of resolution with POAs and interventions by customer service, cause thousands of dollars of probate or executor bills or taxes..... BTW, I know an hour is reasonable for the trusted person part alone when I include the time it took my wife to navigate all the steps to sign off on her role on the account.

My guess at $20/hour payback is probably that highest possible return you'll get.

This reminds me of one of my favorite hobbies (reloading ammunition). On the online forums, there are guys trying to tweak out a half a penny savings per round on ammo that costs 20 cents to buy commercially. They do this to justify their hobby, but if they even considered the cost of their time at minimum wage, the hobby is never a good deal financially. Instead they should look at the value they get like improved quality, fit to purpose and the joy of playing the intricate and fun tools, engineering analysis, etc. Then their time can be seen differently. What is the value you get from bonuses that is not financial?

I am pointing out a similar thing here, from a pure financial perspective, these bonuses are a guaranteed loser for every person if their ancillary costs including labor are included, but there may be other reasons to do them. Be honest with yourself about those reasons and decide based upon them. My observation is that idle hands are the devil's playground and for many folks chasing bonuses is much better than doing something else with their time that they commit to finances, like let's say day trading.....

Here is one observation that should give us all pause. If the consumer really comes out ahead on average on these bonuses, they would disappear. That tells me that the average bonus taker is still ending up putting more cash in the brokerage's account than in their own pocket therefore you have to ask yourself how confident are you of coming out ahead? With the advent of all the bonus chasing websites out there, I believe the consumer value proposition is getting arbitraged away (witness Fidelity essentially dropping the bonuses and using the ZERO approach instead.)
SlowMovingInvestor
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by SlowMovingInvestor »

You can get VUSXX transaction free at Chase You Invest. They have a good offering of 60K UR points for just 75K, but their cash bonuses are on the low side.
SlowMovingInvestor
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by SlowMovingInvestor »

retiringwhen wrote: Thu Apr 04, 2019 7:40 am
Here is one observation that should give us all pause. If the consumer really comes out ahead on average on these bonuses, they would disappear. That tells me that the average bonus taker is still ending up putting more cash in the brokerage's account than in their own pocket therefore you have to ask yourself how confident are you of coming out ahead? With the advent of all the bonus chasing websites out there, I believe the consumer value proposition is getting arbitraged away (witness Fidelity essentially dropping the bonuses and using the ZERO approach instead.)
The average bonus taker, maybe. But I think most people here are distinctly non-average :) I don't think we should be deterred by what the average investor might do.
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ruralavalon
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by ruralavalon »

All Bogleheads live in Lake Wobegon, and are all above average?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
retiringwhen
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by retiringwhen »

ruralavalon wrote: Thu Apr 04, 2019 9:10 am All Bogleheads live in Lake Wobegon, and are all above average?
It is ironic, considering since being average (as in Market Average) is considered the best we can do from an indexing perspective.

I personally figure if it looks too good to be true (and you don't understand the details of how someone is making money) then you are the mark.
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Earl Lemongrab
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Re: Best new brokerage account bonuses- Offer Vanguard??

Post by Earl Lemongrab »

retiringwhen wrote: Thu Apr 04, 2019 7:40 am
Earl Lemongrab wrote: Wed Apr 03, 2019 11:36 pm The bonus is a return for the effort you put in, which these days is minimal.
I believe you are way too sanguine about actual effort required.
No, I don't think so. I've been doing this a long time and the number of transfers I've done probably tops 20.

Most of those things you list vary from important to frivolous. Even if your time estimates were accurate, and I don't think so, it's easy computer sitting work. Think how much time and effort it was for you to post that long message. You got nothing for that.

You tend to be too choleric about these things.
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