The tax benefits of Exchange Traded Funds (ETF)s are clear once you know. They are an improvement on traditional index funds because they delay capital gains taxes because when the ETF stocks are traded they are not bought and sold over and over. They are instead held in waiting until someone else buys them. So you are not really taxed until the day you actually sell your stocks.

Tax Efficient ETF Investing Benefits

Delayed capital gains taxes – they allow an investor to pay most of his capital gains upon final sale of the ETF, delaying it until the very end.
In this respect your wealth accumulates a lot quicker then constantly being knocked by capital gains taxes from the start to the end.

Simple Balanced ETF Portfolio for high gains that actually can beat the market can make up your entire investment portfolio. ETFs outperform traditional mutual funds by as much as 33% more in realized wealth gains towards your retirement.

Personally I try to invest about 90% in ETFs and I even invest in ETF Bond Funds such as iShares Lehman Aggregate Bond (AGG). They are well diversified, management costs are dirt cheap and they are capital gains optimized. What more can you ask for in headache free investments?

Popularity: 72% [?]

Men’s Health gives us four steps to retiring rich. Some of the tips (the first two) come from the author’s discussion with Mr. Warren Buffett.

Here the list:

RULE 1: Instead of trying to time the market, try to tie it. Unless you’re a top sensei yourself, don’t try to beat the market. Instead, cast the widest net possible using index funds. Buy a fund that tracks the S&P 500 or maybe even the entire U.S. stock market. If you’re able to lock in the gains of the market–roughly 10 percent a year, historically–you will have accomplished a vast amount.

RULE 2: When you’re tempted to sell, buy. When stocks are in the tank, your gut will tell you to bail, to move your money into less-volatile investments like bonds or money-market funds. It’s human nature. It’s also a huge mistake. When the market plunges–over days, months, and years–there are opportunities to make real money.

RULE 3: Collect sectors. But you have another best friend, one you don’t spend a whole lot of time thinking about: diversification. You don’t want to be thrown for a huge loss by drops in any one sector. Make sure your holdings cover the entire investment field, so if “energy” collapses, you might be protected by gains in, for example, “financial services” or “health care.” This is another great reason to invest in an S&P 500 index fund: It comprises stocks from virtually every sector.

RULE 4: Invest in yourself (involuntarily). Chances are you’re putting away money for retirement automatically; your employer takes it out of your paycheck, pretax. If you ever want to amass a lot of liquid assets–that is, money you can spend today if you want–you need to set your savings to automatic, as well.

So my Comments on each are:

1. Big thumbs up here because index funds are well diversified and come with no-load fees and very low expense fees.
2. This is also absolutely true because this is where stocks/shares are and will be at there cheapest so in times like this buy as much as you can and save in times of high bubble prices.
3. Yet another beauty of investing in index funds.
4. This way you never forget and it is all done for you.

Popularity: 40% [?]

There was a great post today at Get Rich Slowly that answers how investing in low fee index funds generates up to 33% more in savings.

Using a comparison between low fee index funds with no-load versus class-A mutual funds that do have load fees plus management fees tied to them. You lose up to 33% in fees right off the top every single time that you purchase more stock.

This not only beats down your potential for high returns but also lowers the amount of money that you can withdraw yearly by drastic amounts.

To fully see the drastic change in compounded wealth that is subtracted you have to check Get Rich Slowly “How Lower Fees and Expenses with Index Funds Could Mean 33% More to Spend in Retirement.”

Popularity: 30% [?]