Thursday , 23 May 2024

Overpaying For Underperformance? Probably – Here’s Why

Today’s infographic dives deep into the rabbit hole of fees associated with the investing products sold to most people saving for retirement, while also showing that these same Wall Street products often can’t beat the performance of the market.

The original article has been edited here by for length (…) and clarity ([ ])

1% here, 2% there – it’s barely anything in the long run, right? It turns out, however, that the power of compound interest is so great, that even 2% can be the difference between financial freedom and financial ruin. Put $1 in the stock market for 50 years at a 7% rate of return, and you’ll end up with nearly $30. Get charged a 2% fee to bring your returns to 5%, and your fortune is one-third the size!