04-29-2019, 04:33 PM
(04-29-2019, 01:31 PM)V1GiLaNtE Wrote:(04-29-2019, 12:16 PM)D_Eclipse9916 Wrote: I have both. Slowly moving all my stuff that is actively managed to doing it myself. The returns are decent, but by the time you pay somoene it really hurts your bottom line. Doing it myself usually beats them, but I have only been doing it myself for the past 5 years.
This is where my head is at. Given my current asset size they are looking at a 1.7% fee/year to manage the money. This is on top of what the funds themselves already charge (which are low, thx Vanguard). This is where I'm racking my brain about can I really make up an extra couple of % points with an adviser/manager vs my current "set it & forget it" mentality with target date funds?
Historically, actively managed funds do not outperform index funds. (and many underperform by a lot)
Due to the effects of compound interest that financial planner is affecting your long term wealth in the scale of hundreds of thousands of dollars. 1.7% is fuckin' bonkers btw, most charge around 1%
This relates to my personal opinion that most professions that take pay in percentages is a scam profession, but that's another topic.
IMO two good options without having to spend lots of time researching etc are:
- Wealthfront/Betterment/Roboadvisors: Easy button. Kind of like an actively managed fund by an algorithm. Much lower fees (~.25%), but still fees so the above applies, just a lot less.
- DIY with vanguard funds: lowest fees but you should put some time into what funds to buy to make sure you are diversified properly. Target date funds are also pretty good, just check the fees.