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March 7 - March 9, 2019
One reason why they win is that they base every investment decision on a deep understanding of probabilities, not on emotion or desire or luck.
“You’re not going to beat the market,” he told me. “Competing in the markets is more difficult than winning in the Olympics.
There are more people who are trying to do it and much bigger rewards if you succeed.
Like competing in the Olympics only an infinitesimal percentage succeed, but unlike winning in the Olympics, m...
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Before you try to beat the market, recognize that your likelihood of being successful is extremely small and ask yourself if you spent the time to train and prep...
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you shouldn’t even bother trying but should stick instead with index funds.
Buffett says he’s left instructions that, after his death, the money he leaves in trust for his wife should be invested in low-cost index funds.
“I believe the trust’s long-term results from this policy will be superior to those attained by most investors—whether pension funds, institutions, or individuals—who employ high-fee managers.”
the vast majority of plans are characterized by huge broker commissions, expensive actively managed funds, and layer after layer of additional—and often hidden—charges.
401(k)s
wrote a report entitled The Retirement Savings Drain: The Hidden & Excessive Costs of 401(k)s. What did he find? Customers like him—and you and me—were hit with 17 different fees and additional costs!
these are the additional fees that you’re also being charged by the plan provider that’s administering your 401(k).
These providers are typically insurance or payroll companies—but you might want to think of them as another set of exceptionally well-paid toll collectors.
A worker who earns about $90,000 a year would lose $277,000 in 401(k) fees.
This is why it’s so important to be aware of how the financial industry stacks the odds against you.
Knowledge is your first defense.
Oliver explains how “seemingly tiny fees can mount up” until “you’ve lost almost two-thirds of what you would have had.”
“Think of fees like termites: they’re tiny, they’re barely noticeable, and they can eat away your f———g future.”
the vast majority of plans are riddled with opaque fee arrangements and conflicts of interest.
401(k) brokers can still charge commissions, sell you their own overpriced name-brand funds, and whack you with front-loaded sales charges. Business as usual.
What’s the result? Many of the funds you get to choose from in your 401(k) plan are on the list only because the fund company paid the provider to include them!
In some cases, they even charge a “front-end load”: a fee that often amounts to 3% of your assets just to buy the fund in the first place.
most providers make index funds available only if the plan has a high level of assets. Why? Because index funds aren’t sufficiently lucrative for the provider.
If you work for a smaller company, chances are that you’ll be forced to invest in funds with higher fees.
93% of 401(k) plans have less than $5 million in total plan assets. These are small and midsized companies that don’t have the buying power to demand better investment options for their employees. Yet it’s entirely u...
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Some 401(k) providers do offer index funds to smaller plans, but they typically charge a significant markup.
I quickly and easily moved my company’s old plan into a new plan administered by America’s Best 401k.
The total costs for our new 401(k) plan—including investment expenses, investment management services, and record-keeping fees—add up to a grand total of just 0.65% a year.
Tom charges nothing for companies to make the switch.
Whether you are a business owner or an employee, you can see how your company’s 401(k) plan stacks up by using his free online Fee Checker tool at www.ShowMeTheFees.com. It will analyze your plan and calculate within seconds how much you’re being charged in fees.
Business owners can go one step further and provide a copy of their “fee disclosure” for a more detailed look under the hood.
this quick process can also show you how much you can save over time by swit...
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employers need to wake up—just as Craig and I did—so they can ensure that their employees aren’t being exploited. Otherwise there could be a high price to pay, not just for the employees but also for the employer.
If you’re an employee, after you use the Fee Checker, you can forward the report to your company’s owner or to senior management. Once they know the truth about what’s going on, they may well want to improve your 401(k) plan. After all, their financial future is also at stake.
BUSINESS OWNERS BEWARE! TAKE 3 MINUTES TO DISCOVER HOW YOU CAN ELIMINATE LEGAL LIABILITIES AND PROTECT YOURSELF AND YOUR COMPANY...
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If you own or run a company that offers a 401(k) plan, you’re officially regarded as the plan’s “sponsor”—whether you know it or not. That means it’s your legal obligation to act as the “fiduciary” to your plan and to your employees,...
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What do you have to do? First, you need to demonstrate to the Department of Labor (DOL) that you’re taking the necessary steps to fulfill your role as the plan’s sponsor. This includes periodically benchmarking your plan against other plans to ensure that the fees being charged in your plan are reasonable.
This decision should make it easier for 401(k) plan participants to sue their employers for choosing investments with excessive fees.
Small businesses are particularly vulnerable—not just because it’s hard for them to afford hefty fines but also because they tend to have small 401(k) plans, which typically charge the highest fees.
choosing the right advisor can mean the difference between poverty and wealth, between insecurity and freedom. The choice is yours.
how do you find an advisor you trust—and who deserves your trust?
Maybe you’re wondering if you need an advisor at all. If you decide to manage your own finances, this book and Money: Master the Game will set you on the right track so you can achieve your financial goals.
in my experience, the best financial advisors can add extraordinary value by helping you with everything from investing, to taxes, to insurance. They provide holistic advice that’s truly invaluable.
For me, getting first-rate advice has been a game changer, saving me a tremendous ...
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While the wrong advisors can be detrimental to your financial health, the right ones can be worth their value in gold.
all financial advisors fall into just one of three categories. What you really need to know is whether your advisor is: • a broker, • an independent advisor, or • a dually registered advisor.
Brokers
90% of all financial advisors in America are brokers, regardless of the title on their business card.
Brokers don’t have to recommend the best product for you. What?! Yes, you heard me right. All they’re obliged to do is follow what’s known as the “suitability” standard. That means they must simply believe that any recommendations they make are “suitable” for their clients.
Suitability is an extremely low bar to clear.
there’s a serious conflict of interest here? Damn right!
