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We have accumulated assets in a few different places and types of accounts, such as 401k’s Roth IRA’s, traditional IRAs, and on-line brokerage account.  We also had been receiving guidance from advisor(s) at banking locations in helping us determine where to invest and what type of things to invest in.  We have no debt other than our home and a solid net worth.  We think we might want to retire early, even though we are not sure exactly what that would mean – yet.  Our biggest goal would be to have financial flexibility in the future.

We wanted to assess, in general, how we were doing for the future, how our overall investment mix looked, and try and simplify things as well.  Was it ok? How much risk did we have?  How much were our fees, etc…

Our retirement projection was great.  It showed that we were tracking very well for our future.  We still have to work for many years, but should have flexibility in the future.  We should be able to eliminate all of our debt and have enough in assets so that we can do some of the things that we want to do.

What we found is that we were paying a lot in investments fees in the products that we were using.  In fact, in one of our larger accounts we had C shares (which is something that was very costly over a long period of time).  As we discussed our options and learned more, we decided to try and move as much as we could to Vanguard.

Our goal was to not really reduce our investments in the Stock Market, we were happy with that.  But we wanted to reduce our costs.   Vanguard’s cost structure and focus on index investing seems to make the most sense.   We are not financial gurus, but we now better understand what index investments are and how they compare to more actively managed investments in performance and cost.

After we completed all of transfers, we reduced our costs by about $7,000 on an investment of $400,000.  That works out to be 1.6% each year.  And it is actually greater than that as our investments grow since the fees are taken as a percentage of assets.  Over a long period of time, this is a lot of money – and we are happy to be keeping it for ourselves.

In addition, we had a child after completing the analysis!   We have been contributing $250 month to a college savings plan for him through Vanguard and have increased our term insurances since we now have a dependent.

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Thanks so much for sharing, John.  Great story.  Good luck.

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