In 1976, Bogle was credited as starting the first index fund, the Vanguard 500 Index Fund (VFINX).īack then, the common investment practice was either buying individual stocks or hiring an advisor to manage your portfolio. Today there are websites and forums of loyal “ Bogleheads” that continue to follow his low cost, index fund investing principles. Because of this structure, they’re able to reinvest profits and keep costs ultra low. What makes Vanguard so unique is that its investors are the owners. The late Jack Bogle founded Vanguard in 1975. These funds are typically purchased through platforms such as:īecause we’re going to discuss two of Vanguard’s more popular funds, let’s take a brief look of how they were started. These funds follow their benchmark index regardless of the state of the markets. An index mutual fund is said to provide broad market exposure, low operating expenses, and low portfolio turnover. They allow you to invest in hundreds (sometimes thousands) of stocks at once which helps lower risk vs investing in one or two stocks.Īccording in Investopedia: An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). Index funds are extremely passive requiring little time or oversight vs someone that invests in individual stocks.

Even though most of our money each month goes toward real estate syndications, we do fund the practice’s retirement plan which consists mainly of index funds. If you’ve read any of my articles, you know that I’m all about investing passively in assets that will eventually lead to financial freedom. Each week I’ll send you advice on how to reach financial independence with passive income from real estate.

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