The Vanguard Wellington Fund Is Still Open To New Investors

After recently mentioning that I would consider an investment in the Vanguard Wellington Fund if I wanted to create wealth in such a way that I did not have to spend much time thinking about investments or intended to pass the ownership stake on to someone that did not have much knowledge about investing (i.e. if you wanted to turn your children into trust fund babies in a way that they could not ruin it, you’d want to set up a restricted trust that only permitted the kids to receive the interest and dividend income generated by the fund, perhaps with the instruction that the assets transfer into an S&P 500 index fund if the Wellington Fund were to ever cease to exist).

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Originally posted 2013-07-23 14:16:22.

Royalty Trust Investing: The Gigantic Risk

At the conceptual level, the idea of investing in a royalty trust sounds like a simple straightforward way to earn income because there is no actual asset that you are operating, but rather, you are sitting on your rear and collecting a portion of the profits or sales from a business enterprise.

Typically, royalties (when present) are a component of start-up funding. Imagine if you wanted to begin a brewery, but did not have the resources to buy commercial brewery equipment. The traditional ways that you would raise funds is by either borrowing money from a bank (and giving them a secured interest in the equipment, and possibly a personal guaranty as well). The other way is that you might give up an equity stake to an investor as a capital raise.

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