Index funds are the simplest, lowest-cost, and most evidence-based way to invest. Complete guide from account opening to buying your first fund.
An index fund holds hundreds or thousands of stocks in one purchase. Low cost. Highly diversified. And it consistently outperforms most actively managed funds over time.
An index (like the S&P 500) tracks a list of companies by predefined rules. An index fund buys all those companies in proportion. When you buy one share of VTI, you own a tiny slice of over 3,500 US companies.
Expense ratios:
Actively managed fund: 0.5-1.5% per year
Index fund: 0.03-0.20% per year
On $100,000, that is $500-1,500/year in fees vs $30-200/year. Over 30 years, this compounds into massive differences in final portfolio value.
US investors: VTI (total US market), VOO (S&P 500), VXUS (international).
EU investors: VWRA (Vanguard All-World accumulating), CSPX (S&P 500 on London Stock Exchange).
Global via Interactive Brokers: Any of the above, available from most countries.
That is it. The entire process.
Free to start. No bank connection needed. 150+ currencies, tax estimates for 20 countries.
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