Thread by @still_athletic, New Lesson - Expense RatioThe smallest detailsCan make or break the gameThis [...]

Still Athletic

still_athletic

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚨" title="Polizeiautos mit drehendem Licht" aria-label="Emoji: Polizeiautos mit drehendem Licht">New Lesson - Expense Ratio

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚨" title="Polizeiautos mit drehendem Licht" aria-label="Emoji: Polizeiautos mit drehendem Licht">

The smallest details

Can make or break the game

This lesson is no different

(thread)

What is it?

-The amount you pay

Per year

For owning a fund

What’s a fund, you ask?

-An entity that’s investing your money

Into a group of stocks

What’s a ‘normal’ ratio?

-1.5% is usually what you pay to the fund

For example:

If you invest $10k

Then you pay $150 every year

Might not seem like much,

BUT let’s do the math..

Let’s say you save $1200 per year

For 40 years

And make 10% every year

AND

Your expense ratio is 1.5%

=

You will make $371,051

Nice.

BUT...

You would LOSE $188,508

Due to that 1.5%!!

HOWEVER

Expense Ratios can hurt you!!

The smaller the %

The better.

Now,

Let’s look at another example

Check this out

https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇🏽" title="Rückhand Zeigefinger nach unten (mittlerer Hautton)" aria-label="Emoji: Rückhand Zeigefinger nach unten (mittlerer Hautton)">

You save $1200 per year

For 40 years

And make 10% every year

AND

Your expense ratio is 0.04%

(wayyyyy smaller)

=

You will make $558,842!!!

REMEMBER

A great fund can help or hurt depending on the expense ratio

This is one area that is often overlooked

Make sure to consider this

When you invest.

Like this thread?

What are some funds that you are invested?

Let us know what you think

Never stop being athletic

https://abs.twimg.com/emoji/v2/... draggable="false" alt="💯" title="Hundert Punkte Symbol" aria-label="Emoji: Hundert Punkte Symbol">

You can follow @still_athletic.

Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: