Fidelity Vs Vanguard (Detailed Review)

no staying up till 2:00 a.m. trying to compare brokerages because the more time you waste stuck in analysis paralysis the last time your money is invested and actually working for you when it comes to long-term investing fidelity or Vanguard are the ultimate I've had experience using both of these platforms and I recently decided to go all-in with fidelity so if you're wondering whether to go with fidelity versus Vanguard for your investments I have some thoughts to share with you what is up everyone I'm Rhodes and welcome back to my channel the number one place for financial education empowerment and inspiration a couple of months ago I talked a little bit about fidelity versus Vanguard in this video right here and that video is specifically about the best places to open a Roth IRA and I wanted to go more in depth here especially because there's been some exciting new changes ever since I made that video the first one being that in the fall of 2019 fidelity announced Commission free trading of all stocks bonds and options overall fidelity definitely favors the average investor where anyone of any account size can enjoy zero dollar fees and commissions whereas at Vanguard the more money you have the more favorable treatment you get in terms of fees and commissions on the Vanguard website you can see that anyone with $1,000,000 or more gets free stock trades and even then that's limited to just the first 25 transactions after that it's not free so if you're not quite at the 1 million dollar mark yet which let's be real is the vast majority of us fidelity is much more friendly for the small-sized investor whether you open an account at fidelity with one dollar or one million dollars all your stock ETF and options trades are going to be 100 percent free 99 I do want to give Vanguard some credit though Vanguard has for a long time been the og of passive investing in other words investing in low-cost index funds or ETS Jack Bogle the founder of Vanguard was one of the first people to speak out against the services industry and how it was basically robbing people of their hard-earned money with high fees and all these crazy things that they were charging we can all thank Vanguard and Jack Bogle for setting the standard for all the companies in the industry and keeping everyone honest so until fairly recently if you wanted to buy a super low-cost mutual funds or ETFs Vanguard really was your go-to but not anymore in an effort to catch up to Vanguard fidelity has drastically improved it's mutual fund and ETF offerings as well so much that they even came out with their zero funds which have 0% expense ratios so that means with their fidelity zero funds you can buy mutual funds for free and not pay a fee to have your money invested in that fund my video right here watch you do exactly how to do that so make sure to check out my video on fidelity zero funds right here other than fidelity zero funds pretty much any other fund that you compare a side by side with Vanguard is gonna have lower fees let me show you what I mean right here on the fidelity website so this is a page that compares fidelity index funds to Vanguard index funds side-by-side and as you can see it's pretty interesting they'll show you each fund with the fidelity expense ratio and then the expense ratio for vanguards equivalent version of the fund and you'll see here of course they probably intentionally picked the funds that make them look good but still for example this is the sp500 fund if you invested through fidelity it's an expense ratio of 0.01 5% vanguards same fund charges an expense ratio point zero four percent so fidelity is a little bit better and what's even more interesting and significant is that Vanguard a lot of their funds have a minimum investment three thousand dollars so if you want to invest less than that then you won't be able to invest with so again that's going back to the whole idea of fidelity being much better for the smaller investor and Vanguard their fee structures and minimums tend to favor bigger investors so as you can see here all of fidelities index funds have a zero dollar minimum investment and that literally means if you have one dollar to invest you can invest with one dollar you can buy one dollar of this fund um so let's see other funds they've got the total market index fund which is investing in not just the 500 large caps that are in this fund here but investing in small cap mid cap companies as well and they just go down the list all kinds of stock market funds Small Cap index fund then there's international funds Global X US blah blah blah emerging markets they even have a real estate index fund and of course Vanguard has the equivalent as well and then going down to bonds if you wanted to balance out your portfolio with something more stable than stocks then you could do some bonds u.s. bonds municipal bonds short-term intermediate and so on and so forth so basically you have all the funds you need right here to build a complete portfolio so if you can do that either at fidelity or at Vanguard why not go with the place where you can do it at the lowest cost so it paint the lowest expense ratios something else I didn't mention account fees fidelity does not charge any account fees you can open an account for totally free Vanguard on the other hand charges a $20 annual maintenance fees there are ways to avoid that fee like signing up for electronic delivery of documents and stuff like that but still I don't like the idea of a brokerage firm charging you to keep your money with them to me that's like if a hot girl is on a date with a guy and the guy who wants to charge her $20 to be there he should be stoked to be on a date with a hot girl and does it make any sense to charge her $20 to be there I know it's a silly example but I'm trying to make a point here brokerages they they have many other ways to make money off of your business and I really don't think charging your fee just to have an account with them really makes a lot of sense and just so you know this video isn't sponsored I literally just did some digging compared everything side by side between fidelity versus Vanguard and found that fidelity does better for its users on fees Commission's everything especially if you're starting off small another key difference between fidelity versus Vanguard is that fidelity has more features for trading and active investing if you're planning to buy and sell stocks pretty often or do other kinds of active styles of investing such as magic formula investing or you're more of a trader type then fidelity is gonna be good for you because they have a separate trading application called active trader Pro which as you can see you can download on your desktop and it looks really fancy it has real time price quotes not lagged price quotes and all these charting features and all that something else I've noticed about fidelity is that they do something called price improvement