Profile cover photo
Profile photo
Alain Cheryl
915 followers -
Dance teachers, Salsa, Tango, West Coast Swing, Waltz, Rumba, Cha-cha, Samba, Swing, Foxtrot
Dance teachers, Salsa, Tango, West Coast Swing, Waltz, Rumba, Cha-cha, Samba, Swing, Foxtrot

915 followers
About
Alain's posts

For this valentine Day, experience a Dance Class at Dance Conmigo.

Instead of buying flowers or chocolate, how about an experience such a Tango Class, a Salsa class.

Contact Dance Conmigo to book your appointment.

http://www.danceconmigo.com/2017/02/valentine-day-give-the-gift-of-dance-tango-class-back-ocho/

Post has attachment

Post has attachment

Post has attachment

Post has attachment

Post has attachment

Post has attachment
According to John C. Bogle, founder of Vanguard Mutual Funds, Financial institution,  and financial advisers are stealing 80% for your money. 

http://www.pbs.org/wgbh/pages/frontline/retirement/interviews/bogle.html

Let me give you a little longer-term example. The example I use in my book is an individual who is 20 years old today starting to accumulate for retirement. That person has about 45 years to go before retirement -- 20 to 65 -- and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that's 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow in that 65-year period to around $140,000.

Now, the financial system -- the mutual fund system in this case -- will take about two and a half percentage points out of that return, so you will have a gross return of 8 percent, a net return of 5.5 percent, and your $1,000 will grow to approximately $30,000. One hundred ten thousand dollars goes to the financial system and $30,000 to you, the investor. Think about that. That means the financial system put up zero percent of the capital and took zero percent of the risk and got almost 80 percent of the return, and you, the investor in this long time period, an investment lifetime, put up 100 percent of the capital, took 100 percent of the risk, and got only a little bit over 20 percent of the return. That is a financial system that is failing investors because of those costs of financial advice and brokerage, some hidden, some out in plain sight, that investors face today. So the system has to be fixed.

Editor's Note: For details on this example, see this table.
I've got to unscramble what you just said. You said that in the case of the $1,000 invested for 65 years, the financial system is taking 80 percent of the money. But most of us aren't doing that. In the first place, at 20 we're out spending it; we're not putting it away. But set that aside. We're really talking about people who are probably saving from 35 or 40 or 45 at best for retirement at 55, 60 or 65. and they are plunking the money away into 401(k)s. I'm just asking you, in that system, roughly what chunk of it are people getting back themselves out of their gains, and what chunk of that is going to go to the financial system for managing their money?

Well, in the long run, it's 80 percent to the financial system, 20 percent to you. In a given year, it's about 80 percent to you and 20 percent to the financial system, so if you look at 10 years or 15 years, you're probably talking about 60 percent to you and 40 percent to the financial system maybe over 20 years, something like that. But the longer the period, the greater the impact of that tyranny of compounding costs is.

How do you get costs out of the system? Aren't you stuck? You are in a 401(k), and you've got only 11 options or 28 options from your company, and they are all through Vanguard, Fidelity, T. Rowe Price, somebody else. Can you get the costs out?

Easy. You own [a market index fund]: the entire U.S. stock market or maybe 25 percent international, the entire U.S. bond market, or just simply go to government intermediate-term bonds and don't pay anybody for those services. The costs are going to be about 10 basis points or 15 basis points instead of 2.5 percent a year, that 10 or 15 basis points meaning a tenth of 1 percent or a little bit more. It is all you need to pay to own the market.

Post has attachment

Post has attachment

Wait while more posts are being loaded