Formulate a Financial Plan

Know Your Net Worth

Manage & Minimize Debt

Accumulate Assets

Budget to Live Within Your Means

Understand Investing Basics

Plan for Retirement

Insure People & Property

Deal with Financial Advisors

Review Your Employment Contract

Make Plans for Your Estate

Make Good Decisions


Another instance in which the time value of money works against you is when considering advisor fees. Let’s revisit the earlier example in which annual $1,000 investments are made over 30 years. Suppose the market allows a return of 8% annually. From the previous example we know you could accumulate a nest egg of over $120,000 after 30 years. But instead of managing the investments yourself you pay an advisor 2% per year to manage the investments for you. Instead of riding the 8% curve to the $120,000 nest egg, you ride the 6% curve for an aggregated total of $83,000. The $37,000 shortfall (31% loss) ends up in your advisor’s pocket. Even if the advisor fee is “only” 1% annually, over 30 years your shortfall would amount to around 17%.

Fees have an insidious effect on our wealth accumulation. Zealously reduce fees whenever possible!