From the course: Start Young for Your Best Retirement

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Minimizing fees

Minimizing fees

From the course: Start Young for Your Best Retirement

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Minimizing fees

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- Jack Bogle, the founder of Vanguard and the godfather of the low-cost index fund, started his company with this question. Why do people who invest through traditional advisors put up 100% of the capital, take 100% of the risk, and yet only get 1/3 of the returns? In other words, the finance industry used to take 2/3 of your profit, and what's worse, if you didn't make any money that year, they still charged you fees. Fortunately, times have changed, and the cost of many investments has come way down, but there's still plenty of ways for money to be taken out of your pocket. Let me share five ways to make sure that doesn't happen to you. First, try to keep away from actively managed mutual funds. With those funds, you're paying for humans to actively manage your money, yet the returns over the last 20 years are actually worse than if you'd bought a low-cost index fund that just tracks the market. And if you do buy a mutual fund, make sure you know all the fees including commissions…

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