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From Budget Vouchers to Index Funds: My Journey to Financial Independence and Passive Income

After years of financial struggle and learning, I've built a path toward wealth through consistent saving, index fund investing, and intentional lifestyle choices. This is my story of moving from childhood penny-pinching to building true financial independence in modern Britain. Why I'm Sharing My Story I'm writing this post for three key reasons: Accountability – I want any future financial advice I give to be rooted in honest experience, not just personal bias. Too many finance blogs skip the messy reality of their author's journey. Reflection – Looking back helps me understand how I've reached this point financially, and what shaped my mindset around money. Perhaps it'll help you reflect on your own journey too. Purpose – I'm in a decent place in life, but like many, I'm searching for fulfilment beyond endless scrolling or ranking up in the latest video game. Building something meaningful seems the right direction. To explain how I've end...

How I Built a 2-Fund Vanguard Portfolio on InvestEngine (and Halved My Investing Fees)

 

If you're looking for a simple, cost-effective way to invest in global markets, a two-fund portfolio using Vanguard ETFs on InvestEngine might be the best decision you make this year.

It's the strategy I personally use — and after switching, I realised I’d be paying less than half the fees compared to some of the more popular all-in-one funds.

Let me show you exactly how it works.


Why Keep It Simple?

When you're starting out, the number of investment choices can feel overwhelming. Vanguard alone offers over 80 funds. InvestEngine features 44 Vanguard ETFs. It's easy to get lost.

But the truth is: you only need two funds to build a globally diversified portfolio — and you can do it without paying over the odds in fees.


The 2-Fund Vanguard Portfolio (DIY Pie)

This simple setup gives you exposure to the entire global stock market — including the US, Europe, Asia, and emerging economies.

Fund 1: Vanguard FTSE Developed World UCITS ETF (VEVE)

  • Covers: US, UK, Europe, Japan, Australia

  • Fee: 0.12%

  • Portfolio weight: 90%

Fund 2: Vanguard FTSE Emerging Markets UCITS ETF (VFEM)

  • Covers: China, India, Brazil, Indonesia, etc.

  • Fee: 0.22%

  • Portfolio weight: 10%

This split gives you a portfolio almost identical to Vanguard's popular FTSE All-World ETF (VWRP) — but with a much lower blended fee.




How Much Cheaper Is It Really?

Here’s where it gets exciting.

VWRP (the “all-in-one” Vanguard global fund) charges 0.22% annually.

With our two-fund split:

  • 90% of your money is in VEVE (0.12%)
  • 10% is in VFEM (0.22%)

The average fee comes out to just ~0.13%.

That’s a reduction of over 40% in fund fees.

Real Example Over 20 Years:

Assume you're investing £1,000/month:

Portfolio Total Fees Paid
VWRP (0.22%) £63,972
VEVE + VFEM (~0.13%) £37,670

Savings: £26,302

That’s a massive win — especially when you’re investing for 20+ years.


How to Set It Up in InvestEngine 

Here’s how to build this portfolio in just a few minutes:

  1. 👉 Open a free InvestEngine account here

  2. Go to Create Portfolio > DIY

  3. Add these funds:

    • VEVE – Vanguard FTSE Developed World UCITS ETF

    • VFEM – Vanguard FTSE Emerging Markets UCITS ETF

  4. Set the weights:

    • VEVE: 90%

    • VFEM: 10%

  5. Enable AutoInvest and relax

Done. You’ve just built a low-cost, globally diversified portfolio that’s built to grow with you — without high fees eating into your returns.

Want to skip the setup and use my exact portfolio?


Click here to view and clone my InvestEngine Pie


Why Not Just Use VWRP?

That’s a valid question — and the answer is simple:

Feature VWRP (All-World) VEVE + VFEM
Global exposure ✅ Yes ✅ Yes
Annual fee 0.22% ~0.13%
Platform compatibility ✅ Yes (some) ✅ Yes (InvestEngine)
Fee savings over 20 years £25K+
Customisable by region ❌ One-size-fits-all ✅ 90/10 split

This setup gives you more control and lower fees — and still includes roughly 60% US exposure, just like the VWRP fund.


Accumulation vs. Income: Which to Choose?

Make sure you pick the Accumulation (Acc) version of both ETFs on InvestEngine. That way, your dividends are automatically reinvested — perfect for passive, long-term growth.

If you prefer to receive dividend payouts, look for the Dist (Distribution) versions instead, though these may not be as widely available on InvestEngine yet.


 Why I Chose InvestEngine

There are several platforms that let you buy Vanguard ETFs, but here's why I use InvestEngine:

  • £0 platform fees on DIY portfolios

  • Clean, pie-based portfolio builder

  • Automatic rebalancing

  • Fractional investing

  • Welcome bonus up to £50 (affiliate link below)

Sign up to InvestEngine and claim your bonus


Final Thoughts

I switched to this setup because it’s simple, efficient, and seriously cheap.

With just two Vanguard funds, I get full global coverage, flexibility to manage my allocations, and — most importantly — I’m paying less than half the ongoing fund fees I would with an all-in-one product like VWRP.

If you're just getting started with investing, this is a strategy that’s easy to maintain and easy to scale — whether you're investing £100/month or £1,000+.


Helpful Links


Some of the links in this article are affiliate links, meaning I may earn a small commission if you use them — at no extra cost to you. I only recommend platforms I personally use and trust.

Disclaimer: I’m not a financial advisor, and this blog is for informational purposes only. Always do your own research or speak to a qualified financial advisor before making investment decisions. The value of investments can go down as well as up.

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