I'm 27 years old, looking into investment options for long term ~ 20-30 years. I recently got to know about how and why ETFs can be more tax efficient as compared to most (index) mutual funds. So far I have been investing in zero expense index funds (Fidelity Zero Index funds) for last 1 year. But now I'm confused should I be investing in index fund based ETFs because they more tax efficient as they won't be distributing capital gains every year. Would like to know what others do and why? Thanks TC: $200k (1.5 yrs exp) #investment #personalfinance #retirement #401k #stockmarket #money
How come you are 27 with 1.5 yoe? 🤯
Tax efficiency of etf vs index is almost negligible. Index fund can be automated and pulled from paycheck since settle time is end of day. ETF investment cannot be automated since price is dynamic through the day.
yes, in my research too I realized it's gonna be negligible. But still if we think long term 20-30 years, even a small difference can compound into a big chunk of money. Just want to understand what long term investors usually do? ETF or index funds? I agree on automation part -- investing in index funds is much more easier, you can just automate it from your paycheck.
Difference is like 10k over 30 years. Compare that with Robo advisers which eat up 200k+ over 30 years.
VT and chill
There is also some difference in cost basis calculation if you are investing from the regular account. If it’s 401k, it doesn’t matter.
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Go for index, cause I don't know ETF 😂
I'm already doing index fund. lol
Index is also an etf 😈