Let that sink in a minute – the 30 year cost could easily top a half a million dollars. Worse still – the meter is still running. Thirty years may represent the accumulation phase of our life, but the distribution phase (retirement) can last another 30 years. The math is exponential – meaning that figure can more than double over a lifetime.
… the advisor lives in a world where all growth is taxed. I live in a world where no growth is taxed. In my world, the $1,400 ending balance would bear no tax liability whatsoever – in which case my original statement – “there is no mathematical advantage to tax-deferral” – is 100% true and accurate.
As the dollar gains value, US goods and services become more expensive to world consumers – and sales decline. When sales decline, so do profits, and eventually, so do their stock prices.
…if we implemented the absolute best asset allocation strategy starting in 1972 – and paid just 1% in management fees and 1.25% in mutual fund fees, the best asset allocation strategy would instantly turn into the worst.
A remarkable thing happened in the week or two leading up to Christmas – and it’s worth noting for those of you with money exposed to the market.
I recently ran across an article written by Morgan Housel – a columnist for the Motley Fool and the Wall Street Journal. These are some great nuggets – and worth passing on – edited only for brevity.
