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Vanguard Total Stock Market Index Fund Fact Sheet – VTSAX vs VTI Vanguard Index Funds | The RIGHT WAY to own the Vanguard Total Market Index Fund

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Vanguard Total Stock Market Index Fund Fact Sheet – 6 Tips

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VTSAX vs VTI Vanguard Index Funds | The RIGHT WAY to own the Vanguard Total Market Index Fund
Vanguard’s Total Market Fund can be purchased as both an Index Fund, Vanguard VTSAX, or as an Exchange Traded Fund (ETF), Vanguard VTI. I have mentioned on previous videos that I do not personally own the Total Market Index Fund/ETF because I think it is a gross misrepresentation of what the total stock market actually is. That being said, there is over $900 Billion invested in these funds which means people are buying and holding it anyways. As a result, in this video we are going to cover the actual differences between holding the Vanguard Total Market fund as an ETF vs an Index Fund. There are some nuanced differences that people might not know.

ETF VS. MUTUAL FUND
Vanguard VTSAX is an index fund but it is technically also a Mutual Fund whereas Vanguard VTI is an ETF. Technically, you can own and purchase Mutual Funds from Vanguard with a different brokerage account, but often times, that brokerage has competing mutual funds and will charge a hefty fee to buy and hold them. On the contrary, Vanguard VTI is an ETF and you can purchase a Vanguard ETF

MINIMUM REQUIRED INVESTMENTS
Vanguard Index Funds require a minimum initial investment of $3,000 whereas Vanguard ETF’s such as VTI can be purchased for the cost of only 1 share. Additionally, certain brokerages like M1 Finance allow you to own/purchase fractional shares of Vanguard ETF’s if you don’t have enough money to buy a full share of the ETF.

EXPENSE RATIO
Vanguard VTSAX has an expense ratio of 0.04% per year which results in a $4.00 fee every year for every $10,000 held in the Index Fund. The expense ratio for Vanguard VTI is 0.03% per year which results in a $3.00 expense for every $10,000 invested.

HOW YOU BUY VTSAX VS. VTI
Since Vanguard VTSAX is a mutual fund, no matter when you submit the purchase order, you will not actually purchase shares until AFTER the end of the trading day once the Net Asset Value (NAV) of the fund is re-calculated. Vanguard VTI is an ETF and can be purchased real-time throughout the trading day like a stock.

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47 Comments

  1. The Average Joe Investor
    July 30, 2021 at 6:14 pm

    QUESTION OF THE DAY: Do you currently own Vanguard's Total Market Fund and IF you do, do you own VTSAX or VTI? Let me know in the comments below! * ALSO * What other topics do you want to hear more about? Let me know in the comments and leave your $0.02! =)

  2. Edge of David
    July 30, 2021 at 6:14 pm

    Perfectly explained. Thanks.

  3. JON V.
    July 30, 2021 at 6:14 pm

    Is etf has spreads every time you buy but mutual fund has not. It maybe not much every buy but in long term probably it adds up? Please Correct me if I’m wrong. Thank you

  4. Elie Mounsef
    July 30, 2021 at 6:14 pm

    The problem is if u look at pricing the etf is 100 dollars a share more so u can get more shares if u buy the mutual fund or am I missing something?

  5. Imran Lalani
    July 30, 2021 at 6:14 pm

    VTSAX is what I own in my Vanguard taxable account. I don’t believe in timing the market. I just buy whenever I have the funds available whether they market is up or down. Thoughts?

  6. Chris Kern
    July 30, 2021 at 6:14 pm

    Thumbs down for all the ads man

  7. Mike Fenton
    July 30, 2021 at 6:14 pm

    Correct me if I am wrong, but if you purchase VTSAX in taxable account it essentially acts as ETF. Vanguard as a patent until 2023 that allows the mutual fund to avoid paying taxes on capital gains/dividends

  8. Jose Canisales
    July 30, 2021 at 6:14 pm

    Can you own more than $3,000 on an ETF like VTI?

  9. Divine Feminine InnerG
    July 30, 2021 at 6:14 pm

    I still do not understand. how is investing $3000 and $200 the same. no one has explained this. What am I getting with $3000 and what am I getting with $200 (VTI average)….

  10. james collins
    July 30, 2021 at 6:14 pm

    That facc.. please don't zoom in..🤮🤮

  11. Emmanuel Bravo
    July 30, 2021 at 6:14 pm

    Opened up my Roth IRA in late 2019. Started w/ $500 in money market fund. Bought my first 2 shares of VTI right before the lockdown Feb 2020, & currently own 9 shares of VTI to date.

    Just transferred $3k into my account because I was planning on buying either VTSAX or VXUS but between VTI & VTSAX, I will probably stick to VTI. The slightly lower expense ratio and flexibility to lockdown a lower market price for the ETF allows me to be in control.

    Love the video and content! Subscribed!

  12. Dan Hornaday
    July 30, 2021 at 6:14 pm

    Interesting, I was able to buy into vtsax for 2000.

  13. You
    July 30, 2021 at 6:14 pm

    I have a vanguard roth ira, i only have 1,000, i would long term like to own entirely vtsax, but since i only have 1k in my vanguard roth ira it is less than the vtsax 3k minimum, would it be okay to buy entirely vti for as much shares, then convert to vtsax once it reaches 3000? Would i have to sell then wait and then buy vtsax? or would it be better to buy a 1k minimum index fund and then convert that directly and wouldn’t have to wait, right?

  14. Rachel Berman
    July 30, 2021 at 6:14 pm

    I purchased VTI in November. Its still early on so I'm not seeing huge gains, but the gains have been steady. After watching this video, i will stick with VTI. I want control of the prices I'm paying.

  15. Omalginu
    July 30, 2021 at 6:14 pm

    With this video I decided to buy some VTI stocks, thanks

  16. Ricky
    July 30, 2021 at 6:14 pm

    Why does one cost almost double of the other per share though? As in you can buy more shares of one vs the other for the same money.

  17. Marianne
    July 30, 2021 at 6:14 pm

    Is there any tax advantage to VTI versus VTSAX? Thank you

  18. Rafael Torres
    July 30, 2021 at 6:14 pm

    awesome

  19. Steve
    July 30, 2021 at 6:14 pm

    Vtsax because I like to auto invest it keeps me honest and I can’t talk myself out of it just let it happen.

  20. akira1068
    July 30, 2021 at 6:14 pm

    This helped a lot. I'm currently rolling over an old mutual fund account from another company that I am no longer active to my Vanguard account. I think I will be going with VTI since it will give me the opportunity to keep an eye on pricing per share and option to buy more in the future.

  21. Jnette Hernandez
    July 30, 2021 at 6:14 pm

    If you have a IRA and invest into VTI and FXAIX via the same account. Does compound o treat accumulate to both because it is under the same IRA?

  22. Caliboy79
    July 30, 2021 at 6:14 pm

    Nice video like how you break it all down to explain the difference.i have VTI and VOO on my M1 finance portfolio.do you think vti and voo are too similar to have both in my portfolio?any advice helps thanks.

  23. Spencer C
    July 30, 2021 at 6:14 pm

    As a Canadian is there any reason why I shouldn’t buy VTI ?

  24. Makki Abdelmonem
    July 30, 2021 at 6:14 pm

    Extremely helpful! Thanks a lot Joe!

  25. Mario
    July 30, 2021 at 6:14 pm

    What do you think about buying VTWAX for a long term investment?

  26. TJ Manou
    July 30, 2021 at 6:14 pm

    Is there a P/E ratio for INDEX ETF too like in stocks? Or any time any price works out just fine for long term, say 20 years of $500 per month, investment? Thank you AJ

  27. Kenmo Tocino
    July 30, 2021 at 6:14 pm

    At 2:15 he finally starts getting to the point.

  28. Decmate
    July 30, 2021 at 6:14 pm

    your close up face cuts remind me of pretty fly for a white guy xDD
    (i love it)

  29. Jonathan Molineaux
    July 30, 2021 at 6:14 pm

    I agree that there are definite pros to ETFs but I also think mutual funds offer flexibility as well. For example, although the upfront cost of a mutual fund may be high, the benefits after the purchase allow you to invest whatever amount you want into them after, while ETFs do not provide that luxury. VTI is a relatively high priced ETF (171 as of 8/13/2020) that requires quite a bit of funds to buy shares each time, whereas if you own VTSAX, you can put in significantly less money into the fund each time you invest, allowing you to free up more money to better diversify your portfolio…just my two cents. Great video though!

  30. Michio25
    July 30, 2021 at 6:14 pm

    maaan the editing is quite annoying ….I had to pause the video after 1 min. because you rush the words after the cuts…..in the same annoying tone….its stressful

  31. Mr.Hayman
    July 30, 2021 at 6:14 pm

    Stop getting so close to me please. I feel like I am being assaulted with your face.

  32. Nelson Reyes
    July 30, 2021 at 6:14 pm

    This video: "I was wrong, let me get some views"

  33. PEPA TV
    July 30, 2021 at 6:14 pm

    VTSAX is include on etrade. i already have it

  34. The Good Side
    July 30, 2021 at 6:14 pm

    VTI has .04% fee how do you pay it

  35. cfii2fly
    July 30, 2021 at 6:14 pm

    You spend too much time saying nothing.

  36. kevin woolston
    July 30, 2021 at 6:14 pm

    Hi Joe, I am new to investing and stocks. So what kind of a return can i get from investing 5/10K in vanguard in one year? Or if not vanguard, can you recommend a more profitable stock to invest in>? I am watching your videos and like them very much, you are teaching me a lot that i didn't know and have tried to learn several times in the past but just couldn't get it. So for that thank you very much.

  37. smr144
    July 30, 2021 at 6:14 pm

    This is all common knowledge. nothing about taxes

  38. Roy
    July 30, 2021 at 6:14 pm

    I just stumbled upon your this video and will now follow. I currently own VTI in my brokerage account. Another great benefit of having an ETF in a brokerage account is the tax benefit over mutual funds. Love your energy and you seem knowledgable which is always good when seeking advice on finances…lol.

  39. Castro Castro
    July 30, 2021 at 6:14 pm

    I own 130 VTI shares! Love it.

  40. Alexandrina Castillo
    July 30, 2021 at 6:14 pm

    I own both. So far, so good. I love Vanguard. Thanks for the video. Since watching you, I've learned so much.

  41. Castro Castro
    July 30, 2021 at 6:14 pm

    VTI is the go-to for me!

  42. J C
    July 30, 2021 at 6:14 pm

    Recurring deposits may sway me into preferring index funds.

  43. All Pal
    July 30, 2021 at 6:14 pm

    What do you own or suggest other then vtsax, vti, voo?

  44. J. N.
    July 30, 2021 at 6:14 pm

    I own Vtsax with Vanguard and VTI with Betterment. Thanks for your video.

  45. David Carson
    July 30, 2021 at 6:14 pm

    I own VTSAX–which I have held since slick Willie was president–I bought it late 1990s since ETF wasn't available

  46. Roberto Gudino
    July 30, 2021 at 6:14 pm

    Thanks so much, Average Joe! I just discovered your channel and LOVE IT! Subscribed and liked. 😁Quick question, What's the tax liability difference between an ETF like VTI and a mutual fund like VTSAX? Is one more tax advantaged than the other? Please let us know! 🤔

  47. Sunset
    July 30, 2021 at 6:14 pm

    Once you've met the 3,000 criteria and purchase VTSAX, do you have to get another 3,000 saved before you can buy another index fund?