Index Funds vs Mutual Funds vs ETF 0:00 Intro & Overview 0:42 What is an Index Fund? 1:32 Benefits of an Index Fund 2:15 What is a Mutual Fund? 2:25 What's the difference between a Mutual Fund an an Index Fund? 2:49 Benefits of a Mutual Fund 3:09 What is a ETF? 3:13 What is an exchange? 4:00 Similarities and Differeneces Between Index Fund, Mutual Fund, and ETF 4:39 Which one is the best to invest in? Videos Mentioned: 401k vs IRA Video: https://www.youtube.com/watch?v=PCOljra6Z7E&t What To Do Before You Invest Video: https://www.youtube.com/watch?v=s-54p1O7mUM&t What is an Index Fund? First, An index is a way to measure the performance of the price of stocks, bonds or other tradable assets in the market. This helps us understand how a specific market is behaving, did it go up or down or stay the same. If we had no index then we wouldnt have an easy idea how stocks are performing from today compared to last year. This video will help cover index fund investing for beginners. I'll cover index funds vs actively managed funds. An index fund on the otherhand, copies an index and puts those stocks into a bucket that can be invested in. An example would be the Vanguard's VFIAX which has the top 500 companies in the USA, those companies are in this bucket based on criteria from the index S&P 500. Index funds are great because they have low expense ratios. Index funds are passively managed, meaning there isn't a fund manager and a team of analysts researching stocks for you. The goal of index funds is to match the market. The goal of index funds is to match the market. Subscribe to get new videos on Personal Finance, Career Tips, & Wealth Building: https://www.youtube.com/channel/UCLwX7GJc5jcOTw3tXgwGJIQ?sub_confirmation=1 My Favorite Books to Recommend for Learning about Personal Finance & Productivity: If You Want that Ah-ha Moment - Rich Dad Poor Dad: https://amzn.to/2OqJD2d If You Want To Wipe out Debt - The Total Money Makeover: https://amzn.to/38bhOCi If You to Invest But Keep It Simple - The Simple Path to Wealth: https://amzn.to/30cYKiB If You Want A Roadmap to Real Estate Investing - Set for Life: https://amzn.to/3qik1So If You Want to Start Side Hustles - The 4-Hour Workweek: https://amzn.to/30cYNLj If You Want to Build A Career You Love - So Good They Can't Ignore You: Why Skills Trump Passion in the Quest for Work You Love: https://amzn.to/3rooHYE If You Want to Declutter Your Mind: Digital Minimalism: Choosing a Focused Life in a Noisy World: https://amzn.to/3kHYZM4 My Gear: Camera: https://amzn.to/3uSllix Lens: https://amzn.to/3bgf60c Mic: https://amzn.to/2O0cSco Ring Light: https://amzn.to/3qd2hrD Memory Card: https://amzn.to/3ruxb00 What is a Mutual Fund? The first step of mutual fund investing is figuring out what they are. A mutual fund is a type of investment consisting of a portfolio of stocks, bonds, or other assets. What's the difference between an index fund and mutual fund? The main difference between a mutual fund and index fund is that a mutual fund is actively managed. There is a fund manager and investment team that picks and chooses the best stocks. The goal of mutual funds is to beat the market. What is an ETF? An ETF, or Exchange Traded Fund is a bucket of stocks or other assets that is traded on an exchange. The biggest difference for ETFs is that it can be bought or sold throughout the day compared to Index Funds or Mutual Funds which can only be bought and sold once a day at the end of the day. Which Should I Invest in Index Fund, Mutual Fund, or ETF? If you're a passive investor, want low fees, and just want to match the market then index funds are probably the best option. If you're a passive investor and want to beat the market, then mutual funds are the next best option. If you're actively investing and want to buy and sell throughout the day, then ETFs are your best best. Disclaimer: The above references an opinion and is for entertainment purposes only. I'm not a financial advisor and this is not intended to be investment advice. Consult with a licensed professional for investment advice. Links in the description are typically affiliate links that let you help support the channel at no extra cost.