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003 | Let’s Talk About Fees | Why Investment Fees Are Evil and How to Avoid Them

Learn how devastating fees can be to you net worth and how to avoid them.

  • How to invest your 401k?  Nobody knows!
  • Index funds and low cost ETFs are the way to go
  • Readings that changed our investing trajectory
  • Who outperforms the market?  Nobody.  Hold the course and buy the entire US market.
  • You aren’t going to find a brilliant financial advisor who can outperform the market
  • Running an investment scenario and seeing the impact of fees on a 40-year return
  • Scenario 1: $100k into VTSAX and letting it ride for 40 years = $2.13 million
  • Scenario 2: $100k into VTSAX but hiring an investment advisor.  40 years = $1.46 million
  • Scenario 3: $100k into actively managed fund + investment advisor. 40 years = $1.03 million
  • VTSAX isn’t the only option, but keep in mind that FEES MATTER!
  • This strategy allows us to sleep easy.
  • Buying “US” companies also gives you exposure to international markets
  • Warren Buffett’s advice to his trustee: Invest 90% of his estate in a “very low cost S&P 500 Index Fund (I suggest Vanguard).”

Links from the show:

Books Mentioned in the Show:

Quotes:

  • Reading those articles (Stock Series by Jim Collins) changed the entire course of my investing life.
  • The likelihood of you finding that brilliant financial advisor is as close to zero as possible.
  • What we’re saying is, FEES MATTER.

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