Great video, but you should have led with a compound interest callculation of the difference between the 3% and 6%. It makes the difference between retiring with $422,266 or $1,000,000 over a 30 year period. The 3% difference in fees is 58% of the value of your holdings.
I would really love to see this broken down also. I remember watching a investigative reporting show on TV that talked about this but I didn't understand it.
@@nilnil7325 Hello! I know it's 10 months late but maybe it helps: All is calculated with maths, and is an easy to use formula. If you start with 10, gaining 10%/year the results are like this: 10,00 - 11,00 - 12,10 - 13,31 - 14,64 - 16,11 - 17,72 - 19,49 (near double, in 7 years) This is calculated using the start money invested multiplied by 1,1 (or 110%, as you will have your inicial money, and +10%) So, money in year "x" will be: Money = Starting_Money * [1 + (% of interest)^(year_"x")] --> the "^" symbol means exponential Now, the example above with numbers : Data: Money year 7 (is what we are looking for) with 10% interest and Starting_Money invested of $10 --> 19,49 = 10 * [1+(0,1)^7]= (do the calculation yourself, is 19,487171) Now, you can do it yourself for every % of interest and starting money. If you know some maths, you can calculate anything you want knowing just one part of the formula and calculating the unknown value. So, in the end, now you can do the maths for 3% and 6%, and as you will see, the diference between them with the same number of years and same starting money is quite big and it becomes bigger with time ;) Hope it helps, good luck!
Ils making financial advisor lose their jobs ! (I was one, that job is becoming To inhuman especially when you ordered To only talk with People over 300 000$ otherwise its taken out of your pay)
Due to life, I have three brokers. Two are related directly to the company I work at and the third is local. I pay an upfront fee for my local guy and a transaction fee with the other two. It is important to understand they are helping you because that is how they make their money. In my case, my local guy advises me how to handle my other investments. I am not a finance guy, although I understand it academically. I have a local guy keep me honest and helps me make good decisions. Also, the hardest part is starting. The second hardest is putting money aside every month. After a few years of good habits, it is fun.
Great overview/introduction! I'm glad we don't have to deal with all those fees now. It makes me thankful that I started investing in 2020 in the time of zero fees and fractional shares! On the other hand, it's also the time of expensive and overvalued stocks.
Mutual funds also charge a swing price, where the price of the NAV you pay will swing up or down, depending if the fund has net create or redeem of shares
It depends what kind of product you're investing in. For something that's tracking an index, it certainly doesn't make a lot of sense to pay more than 1%
Great video, although a note: mutual munds are often expensive, too expensive instruments. For example in many countries in Europe, even passively-managed mutual funds can have "expense ratio" of even 5% a year. If we take the average 7% stock market return and taxes, it's less than 2% a year. Fund takes most of the profits out of people's lack of knowledge! Some even dare to take buy/sell fees of 1 or 2%! Better to buy an ETF for e.g. 0.2% expense ratio. Except few exceptions, they are much cheaper, and easily available everywhere in the world.
It's a combination of my undergrad in finance, my CFA studies and my work experience in the finance field :) I've also picked up a few points from books I read in my spare time
Kind of wish you'd covered TER as well, seeing as it's an expense that is found in both mutual funds and ETFs. Explaining turnover and it's implications (both fee-wise and tax-wise) would have been an added bonus.
In short, what is an ETF? Will you cover this in another vid? You refer to it in the vid but I don't know what it is. Can you point me in the right direction to find out?
Well it is like s mutual fund but tracks an index or thing. Lower fee. But if you have one in the oil industry and it goes down. You keep losing money and like mutual funds, it is harder to sell. Only more hard than mutual funds. Basically if you don’t want to do anything yourself, do it. Other wise make your own picks.
I had to double-check the date this clip was uploaded. If you're buying mutual funds with 1-3% ERs (or MERs, as he calls them), you're investing wrong. Heck, I've got index funds in my 401k charging less than .05%. That's correct: 5 hundredths of 1 percent. Shop wisely before you invest, folks. Stay away from funds that have front and/or back-end loads as well.
Hi Zippyphonic, great point! I imagine that the mutual fund you have is an Index Fund, which yes typically you'll see a lower fee with passive funds. The mutual fund you have is also likely part of a series whereby you either have a separate advisor relationship or no advisor with the fund, however it's harder for a beginner to access these mutual funds as they often have requirements that a beginner may not meet (i.e. minimum investment amount). I highlighted the 1%-3% as a basis for beginners, and more of a rough average as opposed to a strict range, but thanks for the comment! Great opportunity to clarify the point.
I invested in the S&P 500 at the all time highest it has ever been. 1 day after that high we have a pull back. News of at least a 15% drop and the whole world is slowing down. I won't even mention what I just did with gold. Hint, the same thing.
There are some funds that charge "performance fees" only, which only come out of profits, but it's unfortunately rarely an option for beginners. Mutual funds charge MERs instead which are paid regardless of the performance. The amounts are automatically deducted from your investment balance.
5:37 I thought brokers were only involved with everything but mutual funds? Your wording, to me, implies that brokers can give you mutual funds. ETA:I'm a newb, as you can tell.
Da_ Manndom that certainly changes the argument a bit! Obviously, holding all else constant, no fees is better than fees, so if you’re buying your own positions, that’s an option. Just keep in mind that you can’t buy every stock through robin hood
From what I have heard. Discount broker, avoid trading when you don’t have to. And avoiding mutual funds. Yes you track the index, but there are decent fees. Like 1% or more. Even low fees aren’t a good deal. You are better off picking your own stocks. Unless you are completely incompetent.
I like the videos, but can someone please turn off or at least turn down the background music? After watching about 8 of these, it's getting really on my nerves :-(
Great video, but you should have led with a compound interest callculation of the difference between the 3% and 6%. It makes the difference between retiring with $422,266 or $1,000,000 over a 30 year period. The 3% difference in fees is 58% of the value of your holdings.
I would really love to see this broken down also. I remember watching a investigative reporting show on TV that talked about this but I didn't understand it.
@@nilnil7325 Hello! I know it's 10 months late but maybe it helps:
All is calculated with maths, and is an easy to use formula.
If you start with 10, gaining 10%/year the results are like this: 10,00 - 11,00 - 12,10 - 13,31 - 14,64 - 16,11 - 17,72 - 19,49 (near double, in 7 years)
This is calculated using the start money invested multiplied by 1,1 (or 110%, as you will have your inicial money, and +10%)
So, money in year "x" will be: Money = Starting_Money * [1 + (% of interest)^(year_"x")] --> the "^" symbol means exponential
Now, the example above with numbers :
Data: Money year 7 (is what we are looking for) with 10% interest and Starting_Money invested of $10
--> 19,49 = 10 * [1+(0,1)^7]= (do the calculation yourself, is 19,487171)
Now, you can do it yourself for every % of interest and starting money. If you know some maths, you can calculate anything you want knowing just one part of the formula and calculating the unknown value.
So, in the end, now you can do the maths for 3% and 6%, and as you will see, the diference between them with the same number of years and same starting money is quite big and it becomes bigger with time ;)
Hope it helps, good luck!
@@decapoli156 That explanation was actually really helpful. Thank you for taking the time to explain it, I appreciate it 😊
@@nilnil7325 Thanks mate ;)
Great video, it is incredible to see how the fees have gone down in the past couple of years, mostly due to Vanguard steamrolling the market.
Ils making financial advisor lose their jobs ! (I was one, that job is becoming To inhuman especially when you ordered To only talk with People over 300 000$ otherwise its taken out of your pay)
Jack Bogle destroyed those excessive fees. His book, The Little Book About Common Sense Investing, is very insightful about compounding costs.
Due to life, I have three brokers. Two are related directly to the company I work at and the third is local. I pay an upfront fee for my local guy and a transaction fee with the other two. It is important to understand they are helping you because that is how they make their money. In my case, my local guy advises me how to handle my other investments.
I am not a finance guy, although I understand it academically. I have a local guy keep me honest and helps me make good decisions. Also, the hardest part is starting. The second hardest is putting money aside every month. After a few years of good habits, it is fun.
Frank Kujawski well done 👍
Why must they eat away at my gains :(
Hungry bastards...
Greed
@Finessa Nugget I think they work for themselves. They're middlemen.
Great overview/introduction! I'm glad we don't have to deal with all those fees now. It makes me thankful that I started investing in 2020 in the time of zero fees and fractional shares! On the other hand, it's also the time of expensive and overvalued stocks.
Hi can you contact me please? I would like to know more about that
Mutual funds also charge a swing price, where the price of the NAV you pay will swing up or down, depending if the fund has net create or redeem of shares
Isn't any fees above 1% a ripoff? Adds up over a lifetime, no good for anyone.
It depends what kind of product you're investing in. For something that's tracking an index, it certainly doesn't make a lot of sense to pay more than 1%
In 2020 you should not pay more than 0.1% for index tracking ETFs or funds
What about 1.1% fees on fixed income? Is that decent investment?
@@MJsPrOuTs No that's shit. You can find global bond funds for around 0.1% at least in the uk
@@plauo9913 is it corporate or government bonds?
🤯 is the gist of my feedback, but it's so good to learn this now rather than the hard way once I get started!
Great video, although a note: mutual munds are often expensive, too expensive instruments.
For example in many countries in Europe, even passively-managed mutual funds can have "expense ratio" of even 5% a year. If we take the average 7% stock market return and taxes, it's less than 2% a year. Fund takes most of the profits out of people's lack of knowledge! Some even dare to take buy/sell fees of 1 or 2%!
Better to buy an ETF for e.g. 0.2% expense ratio. Except few exceptions, they are much cheaper, and easily available everywhere in the world.
Just buy index funds and don't worry about anything
Great content video!! Where did you learn all of this??
It's a combination of my undergrad in finance, my CFA studies and my work experience in the finance field :) I've also picked up a few points from books I read in my spare time
Your freaking awesome dude!! 👍🏽🤜🏽 thanks for all the value you provide for us.
Kind of wish you'd covered TER as well, seeing as it's an expense that is found in both mutual funds and ETFs. Explaining turnover and it's implications (both fee-wise and tax-wise) would have been an added bonus.
In short, what is an ETF? Will you cover this in another vid? You refer to it in the vid but I don't know what it is. Can you point me in the right direction to find out?
Jennifer Grant yes the topic is covered in one of my other videos, you can find it here: ruclips.net/video/3rG72kTNaFs/видео.html
Thanks, got it... now I just have to grow up and let a robot suggest investments for me...
Well it is like s mutual fund but tracks an index or thing. Lower fee. But if you have one in the oil industry and it goes down. You keep losing money and like mutual funds, it is harder to sell. Only more hard than mutual funds.
Basically if you don’t want to do anything yourself, do it.
Other wise make your own picks.
In this series sir looks very serious
I like M1finance. I just hope they aren't shady. I wish I could say for sure, but you never know with young companies.
I had to double-check the date this clip was uploaded. If you're buying mutual funds with 1-3% ERs (or MERs, as he calls them), you're investing wrong. Heck, I've got index funds in my 401k charging less than .05%. That's correct: 5 hundredths of 1 percent. Shop wisely before you invest, folks. Stay away from funds that have front and/or back-end loads as well.
Hi Zippyphonic, great point! I imagine that the mutual fund you have is an Index Fund, which yes typically you'll see a lower fee with passive funds. The mutual fund you have is also likely part of a series whereby you either have a separate advisor relationship or no advisor with the fund, however it's harder for a beginner to access these mutual funds as they often have requirements that a beginner may not meet (i.e. minimum investment amount). I highlighted the 1%-3% as a basis for beginners, and more of a rough average as opposed to a strict range, but thanks for the comment! Great opportunity to clarify the point.
In Canada fees are higher than USA for Same product. Canada mutual funds and ETF are among the highest, they on a going down trend too
Your videos are awesome. What tool are you using to make these videos?
Gracias
Thank you financial bro
Great content
You are amazing, Thank you
Wouldn’t an index fund be a better option than ETFs and mutual funds since there are no brokerage fees?
Many Exchange Traded Funds and Mutual Funds are Index Funds
I invested in the S&P 500 at the all time highest it has ever been. 1 day after that high we have a pull back. News of at least a 15% drop and the whole world is slowing down. I won't even mention what I just did with gold. Hint, the same thing.
Hello #The Plan Bagel
How to calculate overvalued and undervalued stocks price? Is there any formula
Can they get the fees from the profit or i should pay first the fee? Thank you.
There are some funds that charge "performance fees" only, which only come out of profits, but it's unfortunately rarely an option for beginners. Mutual funds charge MERs instead which are paid regardless of the performance. The amounts are automatically deducted from your investment balance.
@@ThePlainBagel i told them to deduct it from the profit but they don't want it. Btw, the company name is cryptohashminefx.com
Fund filled facts.
5:37 I thought brokers were only involved with everything but mutual funds? Your wording, to me, implies that brokers can give you mutual funds.
ETA:I'm a newb, as you can tell.
Some mutual funds CAN be bought through a broker, but only certain versions, so you’re half right
How do you pay those fees if I use robinhood???
There are just three sure things in this life: Death, Broker Fees and Taxes
wiimichell 😁😁😁
No one dies a virgin, because life fucks everyone really hard.
Alexander Elder?
"Transacton" :)
What about robinhood no fees there?
Da_ Manndom that certainly changes the argument a bit! Obviously, holding all else constant, no fees is better than fees, so if you’re buying your own positions, that’s an option. Just keep in mind that you can’t buy every stock through robin hood
Very true. I do love your videos though learned a lot more already keep up the good work man!! Hope to have the knowledge you do asap!!
@@ThePlainBagel Not to mention Robinhood is not operating in Canada
@@josephweaver8545 Very true! Though WealthSimple is apparently going to launch a zero-fee brokerage in Canada soon
@@ThePlainBagel Thanks for the info. I didn't know about WealthSimple trade, I only thought they did robo advising. ; )
From what I have heard. Discount broker, avoid trading when you don’t have to. And avoiding mutual funds. Yes you track the index, but there are decent fees. Like 1% or more. Even low fees aren’t a good deal. You are better off picking your own stocks. Unless you are completely incompetent.
👍
I like the videos, but can someone please turn off or at least turn down the background music? After watching about 8 of these, it's getting really on my nerves :-(
3:25 ish - Transacton (twice)
1 Bagel per share
Well you have to spend some to sell. And it can make you more, if you are luckily.
👎
I don't even like investing, why am I here?
Because investing is an inevitable part of living a ok life for most people unless you want to end up distitute near the one of ends life? :(
those dollars sitting in your wallet and Bank Account? it will lose its buying power one day due to inflation.
@@mynamejeb8743 but so wouldn't the money invested lose its power? 🤔
Common sense investing brought me here. I think I'm going back.