How many times do you lose in a down year when you have “managed funds” where you pay management fees. 🤔
In a down year your investment portfolio/retirement account loses money. So you lose once just from the market dropping.
Your financial guy still charges you the same fees when you’re losing money as when you’re gaining it. So even though they lost you money in a down year they’re charging you “management fees” plus any other account fees associated with managed accounts. Now you’ve lost twice.
Then, if your financial guy can make that money back, they’ll charge you fees again just to get you back to break even. Now you’ve lost three times.
Still don’t understand? 🤔 Here’s an example:
If you start at $100,000 and your account drops to $80,000 that’s a 20% loss, but it’s really greater than that because your financial guy is going to take their fee out too. Even though they lost you money, they’re still going to charge you. That’s losing twice.
Then to get your account back to $100,000 you need a 25% gain. So during that entire period of gains (however long that takes), your financial guy is going to charge you more fees. Now you’ve lost three times.
To recap, you gave them $100k and paid them a bunch of fees just to be back at $100k. If you don’t think things like that happen, I’ll direct your attention to the time period between 2000-2013 where the market dropped 45.55% from 2000-2002 and it took until 2013 just to get back to break even.
You can grow your retirement funds without fees and without the risk of loss. That’s what I help my clients do.