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ot_kathy04

How Much To Contribute In 403b?

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Guest TR1982

I beg your pardon. If you own shares in a Vanguard mutual fund (or any other mutual fund) you are a shareholder. Come on, Sierra, you should know this. This is investing 101.

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Hi,

TR1982, it would be nice if you would contribute to this conversation by answering kathy's questions. She is the reason that this website exist. If you don't want to contribute any information that would be of value to her, start your own conversation and have your argument there about Vanguard.

 

For the record, all of my funds are with Vanguard. I think it is an excellent mutual fund company. It is my first choice when I recommend mutual funds to anyone. Best Wishes.

 

Joe

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Joe, I respectfully disagree. There are a lot of excellent reasons to invest with Vanguard, but it is misleading and wrong to suggest that they are a non-profit. Being a privately held, for-profit corporation and being a non-profit corporation are two vastly different things. Vanguard has as much of a profit motive as any other corporation; they simply make their money in a different way than the Equitables and Merrill Lynches of the world. But I don't think this board is well served by misinformation. I'm sure it was entirely unintentional, obviously, but I certainly don't mind when someone corrects my factual errors. I would hope everyone else who posts here feels the same way.

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Guest Sierra
I beg your pardon. If you own shares in a Vanguard mutual fund (or any other mutual fund) you are a shareholder. Come on, Sierra, you should know this. This is investing 101.

"They are a privately held corporation, very much for profit, to their private shareholders."

================================================

I interpreted this sentence to mean that the corporation (Vanguard) issues common stock that is owned by its private shareholders. But you apparently did not mean this. OK, we are in agreement that Vanguard is owned by its clients, the entities that invest in the shares of the various Vanguard mutual funds.

 

This is a unique form of ownership because the profit generated that is not needed to pay for overhead goes to reduce costs which is reflected in larger investment account balances for their clients---the owners of the shares of the various mutual funds.

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Guest TR1982

It's unique to mutual fund companies. They are all chartered the same way under the Investment Company Act of 1940.

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Guest Sierra

The ICA of 1940 had to do with how an xyz mutual fund operates not its form of ownership. Let me give you an example of what I mean. A few billionaires establish a financial holding company---for the express purpose of establishing and operating an investment company (mutual fund family) under the ICA of 1940. They open up their business with 10 mutual funds to be sold to the public at large. The ownership of the holding company is what I am referring to, not the ownership of the shares that are being sold by the 10 mutual funds. It is this holding company that can be publicly or privately held and in both instances the shareholders of the holding company are looking to make a profit to the same extent as another investor who invests in Walmart. Merrill might be a good example with the issue at hand. If I buy 100 shares of ML I will benefit by any profit the ML Mutual Funds generate without investing directly in any of the mutual funds.

 

The Vanguard Group is not owned in this fashion but by the owners of the shares that the various mutual funds sell. So any profit is used to reduce costs which are reflected in higher share balances.

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Guest TR1982

I was simply responding to a previous post which said they were a "non profit" corporation. By any legal standard or definition they are not a non profit corporatiion. I'm not really interested in this any more.

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Guest TR1982
Hi,

TR1982, it would be nice if you would contribute to this conversation by answering kathy's questions. She is the reason that this website exist. If you don't want to contribute any information that would be of value to her, start your own conversation and have your argument there about Vanguard.

 

For the record, all of my funds are with Vanguard. I think it is an excellent mutual fund company. It is my first choice when I recommend mutual funds to anyone. Best Wishes.

 

Joe

Joe,

I have no problem if you invest in Vanguard funds. I have no problem if you suggest that to others. But when others (not you) provide information which is incorrect, wouldn't you want to know? I thought was one of the reasons for this board. I don't understand why people wouldn't want to know. If I came on here and said that the Travelers VA was a good product and I highly recommended it, do you think no one would respond to that? Come on, take off the rose colored glasses.

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Guest TR1982
Hi,

TR1982, it would be nice if you would contribute to this conversation by answering kathy's questions. She is the reason that this website exist. If you don't want to contribute any information that would be of value to her, start your own conversation and have your argument there about Vanguard.

 

For the record, all of my funds are with Vanguard. I think it is an excellent mutual fund company. It is my first choice when I recommend mutual funds to anyone. Best Wishes.

 

Joe

 

 

Also, Joe, I was not arguing the point about Vanguard. I was only pointing out a glaring error in someone else's post. It was Sierra who was continuing to argue about how many angels can dance on the head of a pin. I agree that discussion is pointless.

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Like Joe I am a co-owner of Vanguard...so then it's not a non-profit of the variety one might donate money too. But while I have no shares I do get the benefit of low cost "action" . By that I mean fees, expenses, transaction charges, benefits of low turnover within most of their funds, with no 12b fees, which are used for promotion and to fund "agents ("who are not always sharks) by most loaded funds and some no load funds. Well we live and learn...I am changing my user name to Teddy Bear...

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I guess I should be used to this by now, but it just strikes me as too much. Here we have Kathy, probably a new reader/poster, asking for some important information (to her), risking coming into this forum, and the topic gets taken in a direction which has some importance (whether Vanguard is non-profit) but which does her no good. On top of that, the sniping starts up again. It's like any excuse to be aggressive, borderline is immediately siezed. What is with you guys anyway?

 

Kathy--I'm with T-Cref and max out my 403b and Roth. If I had to decide between them, I guess I'd max the Roth and then give the rest to 403b.

 

Bill

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Kathy04...see what you started! fun stuff for some and an identity crises for others...just with a simple "how much" question. Wmccall is right and I apologize.

 

When I was struggling in my 30s (I got a late start) I saved 5% for long term as soon as I could afford it. Later I figured I'd be just as broke if I saved 10% so I split my "savings" into long term and short term/vacation. So if no emergency took my vacation money I went somewhere, and I did - Europe, , Italy, Mexico, England, etc..but I didn't always go...that nice litany of countries was over about a 25 year period...and mostly I was too busy living year to year on soft educational grant money..unsure at best..Anyway, the 10% came from the religious concept of "titihing" (10% to God, and I added "the God within") for emergencies/vacations/retirement...and tax refunds went toward vacations or Roth IRAs...worked out nice...Like so many people I need to have it taken automatically from my check...I am apparently incapable of writing a savings check each month...

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Hi, Thanks you Dan Robertson for telling me about this forum. As a former teacher who had to pay dues to acquire the knowledge to effectively invest in 403b's the information that given on this site is extremely valuable.

 

As I understand, the profits from the Vanguard Corporation are distributed back to the mutual fund share holders in the way of lower expenses. To illustrate, the profits that Fidelity and all other mutual fund companies that I know of go to the the owners of the mutual fund company while the expenses to the mutual fund share holders remain high.

 

Kathy, aside from this side discussion, the core information that you received is invaluable, and will vastly change your financial life for the future. It would be wise for you to explore the information that is presented to you.

 

Ira

 

 

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Hi ira,

Great meeting you yesterday at the Vanguard Diehard get together. I look forward to your participation on this forum. Your knowledge and experience about Vanguard will be appreciated as well as the overall problems with options, abuse and the need for publicity with 403bs in K12 districts and teachers' unions.

The food was great, if you like salads and soups, which I do! :-)

Best,

Steve

 

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