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29 January 2014

Daily Ambivalence - fees on 401K plans

So I saw a documentary the other night where people were complaining because managed funds often charge fees each year that amount to as much as 2% of the fund. You know, a charge for various things the fund managers do for their investors like, um . . .

Well, anyway, I don't see what the big deal is. If you consult a compound interest chart and plug in a 2% fee per annum, for a regular Joe who invests over 40 years that only turns out to be 2/3 of the total balance.

Now I'm not that good at math but 2/3 doesn't sound like much. Look at that number. Only a 2 and a 3. Heck, the only numbers lower than those are 1 and 0. No numbers over 5, like 66.

What were those guys in the documentary complaining about? Take a chill pill.

Fees on 401K plans . . . eh.