Tag Archives: Vanguard

JL Collins, VTSAX, FIRE & Impact Investing can they all get along?

A blog I highly recommend is JL Collins. A book I highly recommend is Jim’s book A Simple Path to Wealth. Both are tremendous resources for building wealth and savings. I follow Jim’s methodology which is to save as much as possible and invest it into low cost index funds. The key is not to waiver, stay focused and keep investing even when the market tanks. The beauty of Jim’s message is its simplicity and as such its become a favorite among the Financial Independence Retire Early (FIRE) community.

The backbone of Jim’s philosophy is index investing through Vanguard and the fund he focuses most attention on is VTSAX, their total stock market index fund with a super low .04 expense ratio (ER).

The challenge for me is VTSAX and other funds like it are index funds of the top companies in the United States. For example, VTSAX holds over 3,500 companies, as an impact investor some of those I don’t want to invest in. Among those companies are more than 150 in the oil/gas industry, 13 in the coal industry, 5 manufacturers of civilian firearms, 16 manufacturers of nuclear armaments and 31 major military contractors according to screening tools outlined in my first post.

Simply put I don’t want my investments supporting any of those areas. In reality, completely divesting from all areas you personally deem problematic and still having a relatively simple investment strategy is a challenge and may not be possible. The good news is with minimal effort you can significantly reduce or eliminate exposure to some problematic areas and keep costs lows, sticking to the approach outlined on JL Collins.

VFTAX the Impact Investing ESG Alternative to VTSAX

My core holding is Vanguard’s FTSE Social Index Fund (VFTAX). VFTAX, like VSTAX is an index fund that holds US-based companies and has a low ER of .14. VFTAX has almost 500 companies in its fund and tracks an index modified for certain environmental, social and governance criteria. Looking at its stocks, VFTAX has 25 holdings in the oil/gas industry, none in coal, zero gun manufacturers and 1 major military contractor. Is it perfect? No. But it is a hell of a lot better than VTSAX in areas I care about and it allows me to do all the things that are key to following JL Collins like: high savings, automatic investing and low costs.


VTFAX is my core holding. Of all the impact investing ESG mutual fund options out there, this fund has the lowest costs and best balance. I intend to supplement VFTAX with either another fund to pick up some international exposure and/or some ETFs in areas I am personally interested to invest in. Those endeavors will be the focus of future posts.

Vanguard vs. Schwab

As I said in my intro post, I have accounts at both Vanguard and Charles Schwab each has benefits and weaknesses here is my two cents.


Without question Vanguard is the leader in low cost mutual funds both index and actively managed. Vanguard also allows commission free trading of a wide range of ETFs both their own and also from many other firms (1,800 ETFs and counting).

Vanguard’s automatic investing settings are the best I’ve used. They allow for automatic deposits and investments any day of the week, whereas Schwab allows for automatic deposits any day of the week into your account, but only allows for automatic buys on the 5th or 20th of the month – a major limitation in my mind if your setting up automatic withdrawals that coincide with your pay check for instance.

Access to independent research is non existent at Vanguard which is a limitation for sure. Vanguard does not offer the option to have checks or a credit/debit card linked to your account. Customer service at Vanguard is also not their strength, unless you are a high dollar customer your pretty much on your own.

ESG Impact Investing Options

Vanguard currently has 2 ESG mutual funds and 2 ETFs in their own line up. I own one of them, VFTAX, their other mutual fund is a new ESG world fund, managed by Wellington. There is also access to a number of impact investing suitable ESG ETFs through their commission free list which currently has over 1,800 ETFs.

Charles Schwab

Endless options await you in your Schwab account, its a bit overwhelming actually. Customer Service at Schwab is amazing. I use their chat customer service all the time it is incredibly helpful. You have access to a wide portfolio of mutual funds and ETFs many of which trade for no commission if they are part of the Schwab One Source or other lists. If a fund you are interested in is not on the list, the trading commission is steep.

Schwab has an excellent Visa debit card you can link to your individual investor high yield checking account. The card is amazing it refunds ATM transaction charges anywhere in the world and also has no foreign transaction fee. The card is considered one of the best cards for travel, many open Schwab accounts just to get the card. I’ve recommended the card to numerous people.

Moving money around accounts is super easy. Schwab also has a relationship with American Express and offers two Schwab American Express cards that both have great benefits and signon bonuses that deposit into your account. I use the Schwab Investor Amex card which has a $200 signon bonus and 1.5X cash back into your Schwab account on all purchases.

ESG Impact Investing Options

Schwab produces a lengthy list quarterly of socially conscious ESG mutual funds and ETFs that trade with no commission.

If you find this information useful and signup for a Schwab account please consider using my referral link.