Follow the money. That’s my answer.
The biggest challenge I get about the Elephant’s Paycheck Blueprint has to do with the disbelief that something this simple can exist without everyone knowing about it already.
If you build an Elephant’s Paycheck Blueprint portfolio, who makes money? No one really.
When you purchase your initial shares you’ll likely pay a commission between $8 — $10. After that, you’d only pay similar when you sell… but we hope that’s a long time in the future. If you own five companies, that’s less than $50 for the brokerage you work with. Hardly enough to return your phone calls.
Even if you purchase shares on a monthly recurring amount, you can usually setup direct purchase plans that have no costs (or absolutely minimal costs). You’d pay a commission on sale, but again, we hope to sell only a long distance in the future. Again, no one making money on you.
If the brokerages are not going to make money on you, why are they going to tell you about investing this way? Unlike Faceook or Google, they don’t put ads on their website to off-set “free” products.
I came across a great article on Wealthfront, taking it to task for being expensive and hiding behind double-talk and funny math. It explained the same thing very well, in nice bold text:
Vanguard is the only company in the financial industry that is not trying to make a huge profit off of you. Everyone else is talking their book. EVERYONE.
The whole article is really worth reading. Here’s the link again.
By the way, the phrase “talking their book” refers to selling you their stuff (the stuff in their order book).
I’ve never worked with Vanguard, mostly because I prefer to get into the details of how I invest. In fact, I recently wrote about how companies like WealthFront disempower you from long term wealth building. Reading the article above, I understand how Wealthfront lock you in and not only disempower you emotionally but literally. It would be awful to invest with a company and afterwards realize that moving away from them requires tons of paperwork or a big tax hit.
Back to Vanguard. Very interesting stuff, even recommended by Warren Buffet.