Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Jack Bogle: Wall Street Buys In Bulk, Then Upcharges Investors To The Hilt
Now throw in a typical 1% fee for an adviser and another 1% for the mutual funds he buys for you and run those numbers again.
Magically, your total return over the two decades falls to $327,103 — a decline of 33.2%! Your adviser has cost you $162,860. You paid him $8,413 a year to watch your money grow for you, and for him.
You might buy the slightly larger box of soap and be happy to save 6 cents. To make up the lost opportunity from high investment fees, however, you’d have to opt for the truckload size instead.
Bogle has said it time and again. Fees matter. How the investment industry gets away with charging what they do is truly amazing.
These fees compound themselves annually and thus they are a drag on your $$. Learning early in your career on how to run your portfolio can save yourself 1% advisor fee. Picking low cost MFs or ETFs will help in the long run.
The problem is people don't want to take the time to educate themselves or they have been convinced by the "lobby" they are not smart enough to do it themselves. Therefore, crooked, dumb people are able to drill a hole in their pockets and drip themselves to riches risk free.
I have said many times "Financial Advisor" profession should be outlawed. It is prostitution in reverse, you are paying to get effed.
Comments
I have said many times "Financial Advisor" profession should be outlawed. It is prostitution in reverse, you are paying to get effed.