Home > Uncategorized > Wall Street Eats A Third Of Your Savings – Business Insider

Wall Street Eats A Third Of Your Savings – Business Insider

October 17, 2012 Leave a comment Go to comments

In my post from a few weeks ago, I explained how Wall Street wants your balls – that is, if you compare retirement savings to balls, as I did in the second video in that post.

Investment advisors and mutual funds take money (or balls) out of your account, somewhere around an average of 1.5% a year.

But that’s not the only cost to you, because you now have a smaller account, and you’ve missed out on the growth of the money that could have been in your account if it didn’t go to a financial-services entity.

To illustrate this, let’s assume you have $100,000 and you invest that money in the stock market via a mutual fund that charges 1.5% a year. Let’s also assume that the stock market returns 8% a year for the next 20 years, but paying 1.5% knocks your return down to approximately 6.5%. (Yes, paying some mutual funds and investment advisors leads to market-beating returns, which I’ll get to later.) Here’s what the next two decades could look like:

via Wall Street Eats A Third Of Your Savings – Business Insider.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: