Vanguard, Costco, Coursera...

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lamp1002
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Vanguard, Costco, Coursera...

Post by lamp1002 » Mon Oct 22, 2018 5:05 pm

Hi All:

When I first stumbled upon this site a few months back, I was kind of amazed to find that index funds, e.g. from Vanguard or Fidelity offered the same or better returns as other investment options, but at a fraction of the cost. It's kind of like shopping a Whole Foods, but at a fraction of the price 8-).

And, since then, I have been on a quest to find equivalents outside of investing, e.g. where can you get the same or better product or experience for a fraction of the cost. It's always possible to find things/products that are cheaper, but there are a few gems that are cheaper, but also the same or better quality.

I have found a few near equivalents, e.g. for food shopping, cell phone service, and auto insurance but each of these has some caveat, so they are near hits, but not true hits. For true "Vanguard equivalents", I have found only two:

1. Costco: hardly a surprise to bogleheads. But, like Vanguard, the quality is always excellent, and it's nearly always cheaper than anywhere else (as long as you are willing to buy in bulk).
2. The second one I found is https://www.coursera.org/. If you haven't found this, it's an amazing resource. University level courses that I would argue are *way better* than any I got at any regular university, and at a small fraction of the cost.

What's on your list of "Vanguard equivalents" outside of investing? Curious to hear from others... Cheers :beer

tman9940
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Re: Vanguard, Costco, Coursera...

Post by tman9940 » Mon Oct 22, 2018 5:11 pm

I have two supermarkets within walking distance. One is Giant, the other is Priceright. Although I wouldn't buy certain things from Priceright, other things are way cheaper than at Giant. Almonds, cereal, seeds, and fruit are usually cheaper, and you get more for less money.

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Pete12
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Re: Vanguard, Costco, Coursera...

Post by Pete12 » Mon Oct 22, 2018 6:21 pm

Aldi for groceries- often the same price or cheaper than Costco but you do not have to buy in bulk. Quality is mostly excellent so long as you don't mind private label products!

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GerryL
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Re: Vanguard, Costco, Coursera...

Post by GerryL » Mon Oct 22, 2018 6:32 pm

Your local public library for books, ebooks, dvds, even streaming movies, and lots more.

Tdubs
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Re: Vanguard, Costco, Coursera...

Post by Tdubs » Mon Oct 22, 2018 6:36 pm

Pete12 wrote:
Mon Oct 22, 2018 6:21 pm
Aldi for groceries- often the same price or cheaper than Costco but you do not have to buy in bulk. Quality is mostly excellent so long as you don't mind private label products!
Yep, Aldi's easily beats Costco except for a few key items (fresh meats for example), and it typically beats Walmart except for some canned items (tuna). I've been plugging price comparisons into a spread sheet for a couple months now. You have to shop selectively at Costco.

sawhorse
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Re: Vanguard, Costco, Coursera...

Post by sawhorse » Mon Oct 22, 2018 6:39 pm

Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
GerryL wrote:
Mon Oct 22, 2018 6:32 pm
Your local public library for books, ebooks, dvds, even streaming movies, and lots more.
:thumbsup :thumbsup :thumbsup

sport
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Re: Vanguard, Costco, Coursera...

Post by sport » Mon Oct 22, 2018 7:08 pm

sawhorse wrote:
Mon Oct 22, 2018 6:39 pm
Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
Not everything at Costco has bulk packaging. They have good values in clothing and the quantity is typically one item.

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JMacDonald
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Re: Vanguard, Costco, Coursera...

Post by JMacDonald » Mon Oct 22, 2018 7:44 pm

sport wrote:
Mon Oct 22, 2018 7:08 pm
sawhorse wrote:
Mon Oct 22, 2018 6:39 pm
Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
Not everything at Costco has bulk packaging. They have good values in clothing and the quantity is typically one item.
I buy lots of things at Costco. However, I save the membership cost alone buying Costco gasoline. But I wouldn't be a member if I had a long drive. However, there are plenty of Costco stores in the area that I live.
Best Wishes, | Joe

ChrisC
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Re: Vanguard, Costco, Coursera...

Post by ChrisC » Mon Oct 22, 2018 8:06 pm

JMacDonald wrote:
Mon Oct 22, 2018 7:44 pm
sport wrote:
Mon Oct 22, 2018 7:08 pm
sawhorse wrote:
Mon Oct 22, 2018 6:39 pm
Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
Not everything at Costco has bulk packaging. They have good values in clothing and the quantity is typically one item.
I buy lots of things at Costco. However, I save the membership cost alone buying Costco gasoline. But I wouldn't be a member if I had a long drive. However, there are plenty of Costco stores in the area that I live.
I'm wondering, if Costco will eventually be overtaken by Amazon and become a relic of the past like Sears, Borders, Montgomery Ward, etc. I love Costco for many reasons and it's our go-to-place for many items and services, not merely bulk food stuffs. I've bought several TVs, computers and other electronic equipment, postage and blank checks and other office equipment and goods, vacation services such as car rentals and cruises, HVAC furnaces and condensers thru their special order/installations, great wines (and if in California one can buy hard liquor), etc, etc, etc -- and Costco pays me back in rebates too. It's been worth my membership.

Indeed, Amazon Prime, which I also love, is simply a page taken from Costco's membership feature. And Costco, with it's bulky online presence, is trying to take a page from Amazon's WholeFood's online features, as Costco now is trying to provide online deliveries of groceries and bulk grocery items.

All this competition is good until a dominant competitor drives others out of business. I'm going to miss Sears and Toys R Us.

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JMacDonald
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Re: Vanguard, Costco, Coursera...

Post by JMacDonald » Mon Oct 22, 2018 8:11 pm

ChrisC wrote:
Mon Oct 22, 2018 8:06 pm
JMacDonald wrote:
Mon Oct 22, 2018 7:44 pm
sport wrote:
Mon Oct 22, 2018 7:08 pm
sawhorse wrote:
Mon Oct 22, 2018 6:39 pm
Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
Not everything at Costco has bulk packaging. They have good values in clothing and the quantity is typically one item.
I buy lots of things at Costco. However, I save the membership cost alone buying Costco gasoline. But I wouldn't be a member if I had a long drive. However, there are plenty of Costco stores in the area that I live.
I'm wondering, if Costco will eventually be overtaken by Amazon and become a relic of the past like Sears, Borders, Montgomery Ward, etc. I love Costco for many reasons and it's our go-to-place for many items and services, not merely bulk food stuffs. I've bought several TVs, computers and other electronic equipment, postage and blank checks and other office equipment and goods, vacation services such as car rentals and cruises, HVAC furnaces and condensers thru their special order/installations, great wines (and if in California one can buy hard liquor), etc, etc, etc -- and Costco pays me back in rebates too. It's been worth my membership.

Indeed, Amazon Prime, which I also love, is simply a page taken from Costco's membership feature. And Costco, with it's bulky online presence, is trying to take a page from Amazon's WholeFood's online features, as Costco now is trying to provide online deliveries of groceries and bulk grocery items.

All this competition is good until a dominant competitor drives others out of business. I'm going to miss Sears and Toys R Us.
I don't know how Sears lost it way. I guess really bad management. But the one thing I can't buy from Amazon is gasoline. And I only buy from Amazon if I can't find what I want anywhere else, even if it cost more.
Best Wishes, | Joe

ChrisC
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Re: Vanguard, Costco, Coursera...

Post by ChrisC » Mon Oct 22, 2018 8:25 pm

Just wait and I wouldn’t be surprised if Amazon buys some network of gas stations and integrates it with WholeFoods, which offers electric charge services for electric vehicles at one of the WholeFoods I enjoy lunch occasionally.

I was floored the other day when a Home Depot lumber guy told me that Amazon is a bigger supplier of lumber than Lowe’s or HD. Don’t know if it’s true but got me thinking about Amazon’s reach. Don’t they dominate cloud services?

megabad
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Re: Vanguard, Costco, Coursera...

Post by megabad » Mon Oct 22, 2018 8:30 pm

Aldi (staples)
Toyota/Honda (on a total cost of ownership basis)
Craftsman (hand tools)
Tractor Supply (dog/pet/animal food and other stuff)
Zenni Optical
Maggianos
Waffle House

SoAnyway
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Re: Vanguard, Costco, Coursera...

Post by SoAnyway » Mon Oct 22, 2018 8:51 pm

lamp1002 wrote:
Mon Oct 22, 2018 5:05 pm
What's on your list of "Vanguard equivalents" outside of investing? Curious to hear from others... Cheers :beer
As others have already noted, the first things I thought of on reading your post, OP, were public libraries, Aldi, and Honda/Toyota. I'd also throw in checking out whatever other services/resources your local community government offers. Obviously, these vary by locale, but you might be surprised what resources/activities you're already paying for through your taxes and that are thus offered for "free" to residents. Your neighbors are accessing these benefits. To the extent they're of value to you and you qualify, why shouldn't you?

EDIT: As monito just posted, when I referred to "public libraries" above, I was including all of the amazing online services they now offer. These, too, vary by locale but DO look into what your local library system offers, OP. Similar to what I mentioned re. local community govt. offerings, you'd be amazed at what you're already paying for through your taxes and not taking advantage of. For example, in my locale, I can download books, movies, tv shows, magazine/newspaper articles, etc., all without ever leaving my home or hauling myself to the brick-and-mortar library. I made one trip years ago to get set up and get educated on the offerings. The person at the reference desk couldn't have been more eager and helpful in getting me educated on the available offerings and set up so that I'd never step foot into the brick-and-mortar again.
Last edited by SoAnyway on Mon Oct 22, 2018 10:28 pm, edited 1 time in total.

tommy85
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Re: Vanguard, Costco, Coursera...

Post by tommy85 » Mon Oct 22, 2018 9:09 pm

Credit Unions (generally cheaper compared to banks).

TravelGeek
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Re: Vanguard, Costco, Coursera...

Post by TravelGeek » Mon Oct 22, 2018 9:17 pm

JMacDonald wrote:
Mon Oct 22, 2018 8:11 pm
I don't know how Sears lost it way. I guess really bad management. But the one thing I can't buy from Amazon is gasoline. And I only buy from Amazon if I can't find what I want anywhere else, even if it cost more.
Bad management would be my guess, especially in years.

I have never actually lived near a Costco that had a gas station. So never got the cheap gas. (Nowadays, most of my miles are fueled by solar power, so no big issue). Amazon could buy one of those gas delivery services that try to reinvent the gas station market. If you are willing to let them put packages into your home, why not also let them fill up your car ;)
ChrisC wrote:
Mon Oct 22, 2018 8:25 pm
Just wait and I wouldn’t be surprised if Amazon buys some network of gas stations and integrates it with WholeFoods, which offers electric charge services for electric vehicles at one of the WholeFoods I enjoy lunch occasionally.
Yes, now that they have lots of physical locations, I could see them put EV chargers there. Not to make a ton of money with that, but to give shoppers a reason to come to WF instead of competing grocery stores... and spend more time shopping to get more electrons.

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jriding
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Re: Vanguard, Costco, Coursera...

Post by jriding » Mon Oct 22, 2018 9:32 pm

Alliant Credit Union + 2.5% cashback Visa
Sierra Trading Post (for discounted recreational supplies and clothing)
Local library and Prospector service that extends local library reach to most libraries in the state
My kids for inexpensive lawn service :-)
+1 for Costco and Amazon

Jags4186
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Re: Vanguard, Costco, Coursera...

Post by Jags4186 » Mon Oct 22, 2018 10:02 pm

ChrisC wrote:
Mon Oct 22, 2018 8:06 pm
JMacDonald wrote:
Mon Oct 22, 2018 7:44 pm
sport wrote:
Mon Oct 22, 2018 7:08 pm
sawhorse wrote:
Mon Oct 22, 2018 6:39 pm
Costco isn't worth it if you don't have a reason to buy in bulk or use another of their services. I had a membership one year in order to use their optical department but found that we have neither the room nor the need for so many huge bulk packages. It didn't justify the hour long drive each way.
Not everything at Costco has bulk packaging. They have good values in clothing and the quantity is typically one item.
I buy lots of things at Costco. However, I save the membership cost alone buying Costco gasoline. But I wouldn't be a member if I had a long drive. However, there are plenty of Costco stores in the area that I live.
I'm wondering, if Costco will eventually be overtaken by Amazon and become a relic of the past like Sears, Borders, Montgomery Ward, etc. I love Costco for many reasons and it's our go-to-place for many items and services, not merely bulk food stuffs. I've bought several TVs, computers and other electronic equipment, postage and blank checks and other office equipment and goods, vacation services such as car rentals and cruises, HVAC furnaces and condensers thru their special order/installations, great wines (and if in California one can buy hard liquor), etc, etc, etc -- and Costco pays me back in rebates too. It's been worth my membership.

Indeed, Amazon Prime, which I also love, is simply a page taken from Costco's membership feature. And Costco, with it's bulky online presence, is trying to take a page from Amazon's WholeFood's online features, as Costco now is trying to provide online deliveries of groceries and bulk grocery items.

All this competition is good until a dominant competitor drives others out of business. I'm going to miss Sears and Toys R Us.
When Amazon can deliver me a 1/4 lb hotdog with kraut and a diet coke to my door instantly after completing my purchase for $1.50, then maybe they will overtake Costco.

monito
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Re: Vanguard, Costco, Coursera...

Post by monito » Mon Oct 22, 2018 10:09 pm

Aldi/SaveALot; Whole Foods for bulk grains though; ethnic markets for produce and animal protein.

Google Shopping to compare prices (pulls Amazon prices as they are not the lowest every time)

Online services from public libraries. I enjoy going to physical locations but nowadays Chicago Public Library allows one to borrow electronic materials. Talk about instant gratification/convenience.

sawhorse
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Re: Vanguard, Costco, Coursera...

Post by sawhorse » Mon Oct 22, 2018 10:12 pm

I used to go to a dental school for dental work, and I found it to be a really good value for someone paying out of pocket. Seriously an amazing value. I would go again, but I've moved.

They were very thorough and honest whereas in my experience a good chunk of private dentists tell you that you need unnecessary work. In fact after my husband was told he needed loads and loads of work on his teeth, we went to the dental school for a second opinion, and they said he only needed one minor thing.

That's a real case of paying less and getting more.

Other good values:

Zenni Optical for eyeglasses
Walmart $4 prescriptions
Walmart for over the counter insulin (available in almost all states) and other diabetic supplies
Not a store, but GoodRx has great coupons for prescription drugs
It's often worth a look on ebay for various things
Charity thrift stores for furniture, clothing, and loads of other stuff
Local Parks and Recreation department facilities and classes
Good public schools
State/local/national parks
Dollar Tree has some stuff that's not a great deal, but other stuff is a very good deal

ChrisC
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Re: Vanguard, Costco, Coursera...

Post by ChrisC » Mon Oct 22, 2018 10:46 pm

Jags4186 wrote:
Mon Oct 22, 2018 10:02 pm
When Amazon can deliver me a 1/4 lb hotdog with kraut and a diet coke to my door instantly after completing my purchase for $1.50, then maybe they will overtake Costco.
First, they took away the Polish Hot Dogs; next they will come for the Churro; and then the BBQ brisket will be toast. :( The 1/4 all beef hot dog, with a soda beverage, at Costco's is so old school; it caters primarily to older folks like us, who might be a disproportinately large share of the Costco customer base.

But even Costco is trying to have healthier foods at its food court -- and Costco's Food Court in some ways is beginning to sound like it wants to offer some items you'd find the salad lines at WF or Chopt, where the growing, millenium customer base can be found. https://www.thekitchn.com/costco-food-c ... enu-260490 I think Costco is seeing the future threat that Amazon might pose to Costco, as it's senior citizen customer base declines and youthful customers become addicted to Amazon.

boomergeneration
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Re: Vanguard, Costco, Coursera...

Post by boomergeneration » Tue Oct 23, 2018 7:50 am

Second hand thrift stores. I am amazed by the number of new clothes, with the tags still on them, that can be found among the worn-out items. Also good for items that aren't made anymore. Like when our old VCR finally broke and we wanted one to watch some old movies we still have on tape. We found a dvd/vcr combo in great condition.

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librarianaire
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Re: Vanguard, Costco, Coursera...

Post by librarianaire » Thu Oct 25, 2018 8:54 pm

As a librarian, the love for public libraries does my heart good. Thanks, everyone!

Adding to the list:

* Schwab and Robinhood belong in the conversation with Vanguard and Fideltity. Schwab has been my bank for 10+ years and I’ve always gotten exemplary customer service, ATM rebates, inexpensive or free trades, and very low expense ratios. Robinhood is a great resource for people without much money who want to buy low cost ETFs or try to mirror the market (or a segment of the market) by putting together a shadow index.

* NearlyFreeSpeech.net is a great, incredibly inexpensive place to host small websites or apps. They have a long and superb track record, their pricing model is unique, and their commitment to their customers is extraordinary.

* Any time I can fly Southwest, I do. I pay less than I do with other airlines and I get far, far better service.

* Anyone who uses public WiFi (including at libraries or airports or cafes) should use a VPN, and Private Internet Access seems to be, by a pretty fair margin, the least expensive reliable VPN. While it’s rarely ranked as the best, it’s usually ranked among the best, and usually at a fraction of the price.
“Our own experience provides the basic material for our imagination, whose range is therefore limited.” Thomas Nagel, What is it like to be a bat?

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celia
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Re: Vanguard, Costco, Coursera...

Post by celia » Thu Oct 25, 2018 9:10 pm

AirBnB ... As long as you select the right hosts. The "super hosts" aren't necessarily better, but they are dependable, known hosts. We have a much richer experience staying in one AND at a lower cost than a bare hotel room.

The selection at college plant sales (when they have a horticulture dept) and native plant nurseries is world's better than at home improvement stores or local nurseries. Same prices, but better choices.

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Re: Vanguard, Costco, Coursera...

Post by sawhorse » Thu Oct 25, 2018 9:26 pm

This might be an obvious one. Store brand items.

Sometimes there are meaningful differences in quality. For example, CVS tape doesn't hold up, and their envelopes have too little adhesive to lick, so the envelopes don't close right.

Sometimes there are differences in quality that might not matter. Store brand toilet paper is rougher, but that's not a big deal unless you have problems down there.

Sometimes there is no difference at all. Store brand sugar is the exact same as brand name sugar. Same with most over the counter medications. There are a few that I buy brand name because I prefer the taste or texture, but there's one where I like the store brand taste better.

There's a bit of trial and error, but that's the same for brand name products too.

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Re: Vanguard, Costco, Coursera...

Post by sport » Thu Oct 25, 2018 9:38 pm

sawhorse wrote:
Thu Oct 25, 2018 9:26 pm
This might be an obvious one. Store brand items.

Sometimes there are meaningful differences in quality. For example, CVS tape doesn't hold up, and their envelopes have too little adhesive to lick, so the envelopes don't close right.

Sometimes there are differences in quality that might not matter. Store brand toilet paper is rougher, but that's not a big deal unless you have problems down there.

Sometimes there is no difference at all. Store brand sugar is the exact same as brand name sugar. Same with most over the counter medications. There are a few that I buy brand name because I prefer the taste or texture, but there's one where I like the store brand taste better.

There's a bit of trial and error, but that's the same for brand name products too.
One interesting fact about private labels: Costco's Kirkland Signature brands are equal to, or better than the national brands. If you buy one and do not agree, they will refund the entire cost when you return the unused portion.

Momus
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Re: Vanguard, Costco, Coursera...

Post by Momus » Thu Oct 25, 2018 9:49 pm

Unless Amazon start selling $1.5 hotdog + unlimited soda, $9.95 large pizza 18'' wide with 1.5 lb of cheese on top/Supreme topping. I won't stop going there.

People are very loyal to Costco. Look at Costco stock after a massacre exiting Amex relationship.

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Re: Vanguard, Costco, Coursera...

Post by FrugalProfessor » Fri Oct 26, 2018 2:53 pm

You can take my Costco card from my cold dead hands.

Here is a post on how to take your Costco shopping to the next level: https://www.frugalprofessor.com/how-to- ... ke-a-boss/

Here is a post comparing Costco to Aldi & Walmart: https://www.frugalprofessor.com/aldi-vs ... s-walmart/

I also like:
* www.camelcamelcamel.com (amazon price comparison)
* www.lastpass.com (password manager)
* nature (https://www.frugalprofessor.com/2018-wi ... ip-report/)
I blog. Taxes are the lowest hanging source of alpha.

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Re: Vanguard, Costco, Coursera...

Post by WhiteMaxima » Fri Oct 26, 2018 3:07 pm

Trader joe's
Lido
Sam's club, Costco

xb7
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Re: Vanguard, Costco, Coursera...

Post by xb7 » Fri Oct 26, 2018 9:39 pm

I used to include USAA in this short list --- of companies that can seem to swim against the worst aspects of capitalism, where it becomes more like an on-going contest between consumer and corporation. As Vanguard says, they're a "mutual" mutual fund company, interests aligned with those of their investors.

When I was a young officer on active duty, USAA was pretty much exclusively about providing insurance to military officers, taking advantage of the overall better characteristics of this pool of insured people to offer better rates, but also to provide great service in a context where --- like Vanguard --- it seemed like they were all about taking best care of their clientele. I still insure through them, but in recent years it seems to me that they've had some major mission drift. They serve a much wider audience now, they advertise quite a bit I think --- they never needed to advertise earlier. And I don't always feel like they're so concerned anymore about what's best for me.

This stuff is pretty subjective, however; I haven't done any sort of deep analysis, just perhaps my "grumpy old guy" perspective?

I'm a real fan of trying to create such a list. I wish there were a longer and more certain set of firms to put on it.

Ron Scott
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Re: Vanguard, Costco, Coursera...

Post by Ron Scott » Sat Oct 27, 2018 7:07 am

I just gut renovated a condo in Boca:

1. “Saved” $80,000 by getting bids from 3 contractors. No negotiations. Workmanship was top notch.

2. Got a 33% discount at Porcelanosa (tile) saving about $9,000 through friendly but relentless negotiations over 3 visits to store.

3. Saved an additional 5%/~$2000, on top of summer sale prices + 15%-off for credit card signup, at Build.com just by calling them and asking one question: “Can you do any better if I buy everything in my cart from you right now?”

Saved $900 (off US price plus NYC tax) on a Louis Vuitton pocketbook by buying it in Paris. Lower retail price, currency conversion, VAT refunded at airport. (Don’t get me started on why my daughter “needed” this thing. 30th birthday, with valid pre-approval notice by wife.)

Saved ~$2000 off next lowest price on my last car. Visited 4 dealers personally and test drove car at all of them. Then sent specs to all 4 by email, telling them I was price shopping, I’d be buying immediately and based on final price including fees. 3 of them responded. Placed order the next day. Beat all that “fair price” crap on the Internet.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

bltn
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Re: Vanguard, Costco, Coursera...

Post by bltn » Sat Oct 27, 2018 10:08 am

GerryL wrote:
Mon Oct 22, 2018 6:32 pm
Your local public library for books, ebooks, dvds, even streaming movies, and lots more.
Amazing to me how few people take advantage of their local library. Is it because relatively few people read books?

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Nords
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Re: Vanguard, Costco, Coursera...

Post by Nords » Sat Oct 27, 2018 12:04 pm

xb7 wrote:
Fri Oct 26, 2018 9:39 pm
This stuff is pretty subjective, however; I haven't done any sort of deep analysis, just perhaps my "grumpy old guy" perspective?
Yes, it's your grumpy old guy perspective. I've been to a number of USAA conferences and I'm familiar with their business model.
xb7 wrote:
Fri Oct 26, 2018 9:39 pm
When I was a young officer on active duty, USAA was pretty much exclusively about providing insurance to military officers, taking advantage of the overall better characteristics of this pool of insured people to offer better rates, but also to provide great service in a context where --- like Vanguard --- it seemed like they were all about taking best care of their clientele.
Membership was opened to "All who served honorably, and their families" in 1996. At the time the military had gone through the largest drawdown since WWII. The core membership (officers) was too small to sustain USAA's fixed expenses, and the membership was also dying off at an alarming rate.

By opening up the membership, today USAA has over 12 million members. (Only members are eligible for property & casualty insurance, but anyone can buy USAA life insurance or use their bank or their brokerage.) In 2011 that member number was only about eight million, so growth seems reasonable. Those fixed expenses are spread across a much larger pool. This is critical because each USAA product & service has to pay for itself. There are no loss leaders or soft dollars or "grabbing for market share" or other subsidies. USAA's risk criteria are actually tight enough that they'll drastically hike policy premiums in certain ZIP codes or refuse to issue insurance at all until the concentration risk drops off.
xb7 wrote:
Fri Oct 26, 2018 9:39 pm
I still insure through them, but in recent years it seems to me that they've had some major mission drift. They serve a much wider audience now, they advertise quite a bit I think --- they never needed to advertise earlier. And I don't always feel like they're so concerned anymore about what's best for me.
You might have missed the ads in the 1980s and 1990s in military magazines and the millions of dollars that USAA used to spend on direct-mail advertising.

The advertising you see on TV, radio, and websites today costs less (inflation-adjusted) than USAA's advertising during the latter years of the last millennium. They've shut down most of their print advertising, and those savings have been shoveled directly into the current advertising budget.

USAA has also partnered with major sporting leagues for their Salute To Service events. The crowds are full of USAA's demographic. It gets the audience interested in the military (more USAA members) and veterans learn that they can join USAA. Hopefully they're all members for life.

If you want to see a very interesting initiative to attract members, take a look at USAA's YouTube videos of "Service & Ink". It's a common bond between today's servicemembers and yesterday's vets. Production costs come out of the advertising budget, and they're incredibly cheap-- basically a camera and two crew. The ROI ("I'm signing up because I saw your Service & Ink episode") has been well worth the cost.

You are absolutely right that they're not so concerned about what's best for you. They're concerned about serving the entire membership by spreading out the fixed costs and by minimizing the claims exposure risks. Sometimes that means you can't get the price you want (or even the policy you want) because it might cost too much in claims for the membership to maintain the capital reserves.
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denovo
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Re: Vanguard, Costco, Coursera...

Post by denovo » Sat Oct 27, 2018 12:09 pm

GerryL wrote:
Mon Oct 22, 2018 6:32 pm
Your local public library for books, ebooks, dvds, even streaming movies, and lots more.
My library allows me to get audiobooks and ebooks on my phone without my lazy butt even having to go to the library.
"Don't trust everything you read on the Internet"- Abraham Lincoln

almostretired1965
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Re: Vanguard, Costco, Coursera...

Post by almostretired1965 » Sat Oct 27, 2018 12:53 pm

If you live in a major metropolitan area, check out the Korean or Chinese groceries like HMart, GrandMart, Great Wall, etc., for fresh produce. I am mainly familiar with the ones in the DC suburbs. The Korean ones in particular have both high quality and low prices. In addition, if you like fresh seafood, the selection and quality are, IMO, an order of magnitude better than a typical supermarket.

Personally, I don't care for Costco for produce, except for the Romaine lettuce. For the most part, compared to the Asian groceries, the prices are higher, the quality is similar or worse, and I have to buy so much that half of it spoils before I use them.

sawhorse
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Re: Vanguard, Costco, Coursera...

Post by sawhorse » Sat Oct 27, 2018 2:34 pm

almostretired1965 wrote:
Sat Oct 27, 2018 12:53 pm
If you live in a major metropolitan area, check out the Korean or Chinese groceries like HMart, GrandMart, Great Wall, etc., for fresh produce. I am mainly familiar with the ones in the DC suburbs. The Korean ones in particular have both high quality and low prices. In addition, if you like fresh seafood, the selection and quality are, IMO, an order of magnitude better than a typical supermarket.

Personally, I don't care for Costco for produce, except for the Romaine lettuce. For the most part, compared to the Asian groceries, the prices are higher, the quality is similar or worse, and I have to buy so much that half of it spoils before I use them.
The HMart nearest me is more expensive than Whole Foods for some items :shock:

tj
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Re: Vanguard, Costco, Coursera...

Post by tj » Sat Oct 27, 2018 3:48 pm

I've been to a number of USAA conferences and I'm familiar with their business model.
How do the enlisted military not notice that they don't get competitive rates,though? Do they just not shop around?

E.G. premium comparisons from Hawaii, when you compare USAA vs USAA CIC vs Garrison P&C vs USAA GIC. There is quite a difference.

https://cca.hawaii.gov/ins/files/2018/0 ... cation.pdf

My understanding is CIC is for past dependents of officers, GIC for enlisted military, Garrison is for past dependents of CIC members. CIC and Garrison seem to have the same rates, but CIC policies seem to get dividends and Garrison does not.

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Re: Vanguard, Costco, Coursera...

Post by Olemiss540 » Sat Oct 27, 2018 6:59 pm

Harbor Freight for hand tools, vehicle Jack's (not stands), and zip ties,etc.

Have held up to relentless abuse, without an issue. A HECK of a lot cheaper than comparable craftsman so if it ever does break I can buy another set and still be above water. Absolutely love that place and has helped me afford many DIY repairs I would have otherwise hired out due to lack of equipment.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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Nords
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Re: Vanguard, Costco, Coursera...

Post by Nords » Sat Oct 27, 2018 7:17 pm

tj wrote:
Sat Oct 27, 2018 3:48 pm
I've been to a number of USAA conferences and I'm familiar with their business model.
How do the enlisted military not notice that they don't get competitive rates,though? Do they just not shop around?

E.G. premium comparisons from Hawaii, when you compare USAA vs USAA CIC vs Garrison P&C vs USAA GIC. There is quite a difference.

https://cca.hawaii.gov/ins/files/2018/01/Motor-Vehicle-Premium-Comparison-Consumer-Complaints-Guide-2018-Publication.pdf

My understanding is CIC is for past dependents of officers, GIC for enlisted military, Garrison is for past dependents of CIC members. CIC and Garrison seem to have the same rates, but CIC policies seem to get dividends and Garrison does not.
I've talked with a lot of members about that, and with USAA staff too. Let me answer the bigger picture around more than insurance.

I'm not sure of the policy for USAA Subscriber Accounts. (What you refer to as "dividends" are technically returns of premiums from USAA's reserves.) From what I've read, I think that only military members ("those who've served honorably") have Subscriber Accounts. I don't think that family members (like adult children of USAA members) have them.

I don't know if USAA uses those member criteria that you mention for those insurance companies. USAA's big-picture answer is that they have to comply with the laws of 50 states + DC and territories, so they use different companies for those purposes. USAA might also choose to lay off the insurance risks of less-common policies like airplanes, motorcycles, personal watercraft, and ATVs. (They even partner with Progressive.) USAA's very conservative-- perhaps excessively conservative-- about concentration risk and higher-risk equipment. This would be an instance where most of the members aren't subsidizing the premiums of Jetski owners, but all of the Jetski owners are insured with another company (subsidiary or partner) which is set up to handle that higher-risk pool... and those members are paying the fully risk-adjusted premium for that Jetski coverage.

Some members don't do the research to realize that USAA's mutual fund expense ratios are so high. They just see the link off the website (or the app) where they have their vehicle insurance (which they bought when they joined the military or bought their first car) and they click through. The good news is that they're investing. The better news is that they eventually realize that expenses matter and they think about moving to cheaper expense ratios.

Other members don't care. They needed to have a checking account for direct deposit of their military pay, and the recruiter suggested that they sign up with USAA, so they did. They figure that USAA will take care of them, even if they call at 3 AM from Afghanistan. They haven't gotten around to looking for higher interest rates on CDs from military-affiliated credit unions. I'm not sure how well that 3 AM call works out with Fidelity or Vanguard or Armed Forces Insurance or GEICO. When I broke down in a loaner car (luckily insured by USAA) at the gate of the Navy base in Rota, Spain at a very awkward hour of the night, USAA immediately answered the phone (from London) and had a tow truck there in 20 minutes.

Other members do their research and they do care, but still go with USAA in the expectation of better member service for insurance claims. Unfortunately the best way to test that expectation is to file a claim, and that's when all insurance companies can make a really good (or really bad) impression. USAA members (and former members) have impassioned feelings at both ends of the bell curve on that topic. The angriest USAA members I've ever seen are the ones who've dealt with auto collision repairs.

Other members (like me) have lived in one location for 29 years-- and in that time have consistently paid about the same $75/month to insure two vehicles. The key is that we do not carry comprehensive or collision insurance, only the state requirements plus extra liability. GEICO and other companies have not been able to beat USAA's premiums for that subset of coverage. I'm a Berkshire Hathaway shareholder and even that GEICO discount can't compete with USAA's quote on our 12- and 13-year-old Priuses.

Some members don't have a choice. During the early 2000s, USAA only wrote homeowner policies in Hawaii for first-time buyers for nearly a decade. We couldn't insure our home with USAA even if we wanted to. They re-entered the home insurance market in 2012 or so at ridiculously high premiums compared to tiny little Armed Forces Insurance. When I last compared policies between USAA and AFI in 2016, AFI had the edge by only a few dollars. (Maybe it's because we carry very high deductibles.) I do the comparison every 2-3 years and I have no problem with switching between those two, because I know their customer service.

Finally, one USAA exec refers to their member behavior as "consolidation, convenience, and trust". A surprising number of the members have USAA checking accounts, USAA credit cards, USAA mutual funds, USAA CDs, USAA home & auto insurance, and USAA umbrella liability insurance. They like having it all in one place. Some members are willing to pay a premium over the premiums for those features.

Here's more perspective from a 2017 conference:
https://the-military-guide.com/usaa-answers-insurance-financial-questions/
(Moderators, I think I'm within the posting guidelines here, but let me know if I've crossed the line. The post gives more details on the issues and I'm not earning any revenue from this link.)
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tj
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Re: Vanguard, Costco, Coursera...

Post by tj » Sat Oct 27, 2018 7:57 pm

I'm not sure of the policy for USAA Subscriber Accounts. (What you refer to as "dividends" are technically returns of premiums from USAA's reserves.) From what I've read, I think that only military members ("those who've served honorably") have Subscriber Accounts. I don't think that family members (like adult children of USAA members) have them.

https://content.usaa.com/mcontent/stati ... 1533094972

^ That's an interesting brochure about the Subscriber Account. As noted, it only applies to those who have policies who are insured by actual USAA, but not the other insurance companies. My understanding was that officers make up actual USAA, but I definitely could be wrong. It's not exactly public knowledge.

The automobile dividend is different from the Subscriber Account, some subsidiaries get them, some don't - noted in this USAA forum thread: https://communities.usaa.com/t5/Insuran ... d-p/108194
The automobile insurance dividend approved by the board of directors this year was: USAA Casualty Insurance Company (CIC) equal to 2.0% and USAA Limited (LTS) equal to 2.5% of automobile premiums paid by a member between May 1, 2015, and April 30, 2016.


No dividends were approved for USAA General Indemnity Company (GIC) or Garrison Insurance Company (GAR).
And for the subsequent year:

https://communities.usaa.com/t5/Insuran ... 371/page/2

The automobile insurance dividend approved by the board of directors is USAA Casualty Insurance Company (CIC) equal to 2.5%, and USAA Limited (LTD) equal to 2.5% of automobile premiums paid by a member between May 1, 2016, and April 30, 2017. Dividends are approved by the board of directors of each company based on the individual financial performance of each company.

Lyra
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Re: Vanguard, Costco, Coursera...

Post by Lyra » Sat Oct 27, 2018 10:06 pm

I've had really great luck shopping online at Poshmark for used clothes. I can search for exactly what I want (size, style, maker) and find it-which isn't always possible going store to store (and thrift store to thrift store). In the past 2 weeks I've found -and bought- 5 pairs of jeans I had been looking for, but unable to find, for the past year. One pair was $5, another $10. This has been a huge help to me because I usually can't find clothes that fit. Once I know something fits I can check Poshmark-which even allows some bargaining.

Agree with others about the public library, and Coursera. We also have a center here that lends mobility equipment to people, I believe for free. That was helpful to a friend after surgery.

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