Category Archives: MyRealInvesting

Tom’s Finance Tips for Young People (Under 35 years old)

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I have been talking with a friend from work, Tom, about finances for some months now. He felt inspired to share some thoughts about finances with others. This is a first, a guest post on MyWheelLife. I hope you enjoy.

Tom’s Finance Tips for Young People (Under 35 years old)

1) Learn to assess personal value. This is the absolute most important thing to master when making purchases. What I mean by this is imagine a young person who wants to buy a table saw, and the table saw cost $400. Should they buy it, $400 is a lot of money for a tool. So it all boils down to value. Value is defined as the price of product / usefulness of the product to the purchaser. Everyone pays the same price but each person has a unique “usefulness”. So simply answering the question based on cost is impossible. You have to be realistic with yourself on how much you will use something and if it really is important to you to justify the money.

The premise sounds so simple, but I continue to see people make terrible decisions assessing value. You have to be honest with your assessment of time, sometimes we have ideas in our heads that are not realistic.

For example, my neighbor has a nice mustang sitting in his 3 stall garage. He wants to protect it because it cost a lot of money so he parks it in the middle of the 2 stall portion, and then the 3rd stall is filled with crap. He doesn’t want to drive it in the winter because it is rear wheel drive or expose it salty roads. He has a beater car that he drives to work and another SUV for the family. All year they park their cars outside, scrape the windshields in the winter, so that this mustang can sit in the garage to be protected. Is this good value? The vehicles they use every day are being taken care of less than the vehicle used a couple of times per year.

Another example, my brother drives a Lexus. For a conservative like me, why would anyone drive a Lexus? Some may argue they break down less or last longer etc., but there are many alternatives that would be more cost effective. I believe luxury cars to be status symbols more than anything. So it is a terrible idea, correct? He is a commercial real estate agent and is constantly driving around high net worth individuals. His car is his office, therefore there is high value. A beater car doesn’t make sense here. It is okay to be expensive things if they have high value.

One more example, I drove a 1999 Pontiac Grand Prix for years. I got it from my parents, and kept it running. The thing was rusted real bad and got in an accident at one point. I had them repair the mechanical portion from the accident but just left the body work as is. That car cost me nothing, great price. The problem was that it was in such disrepair that a break line rusted out in a parking lot, and it was becoming not a safe vehicle to drive. One day as I was going through a busy intersection on my way to work, I realized if my brakes went out right now, or this car crapped out on me, I could be injured or killed. I am cheap, I hate spending money, but then if I can’t work how much money am I really saving. I got rid of that car and bought one from my parents that they were going to trade into the dealer back home. The moral of the story is that sometimes the cost is not just the product cost, but in this case also the cost of the potential injury. If you factor that in, a newer car was cheaper.

2) Financing, be careful. I am a strong believer that there a few things that you should finance and nothing more. Those things are a college education (assuming you have some level of ambition and a plan), a house, and sometimes a car. The things on the naughty list are vacations, campers, boats, ATV’s, marriages, furniture, anything out of a big box store, and home remodeling.

The goal is to knock down recurring monthly expenses as much as possible. With big ticket one time purchases, you are more likely to be realistic with your expectations compared to monthly payments and assess personal value. The auto people love to shove financing at you. I only buy cars with cash, and when we bought one of our cars, the sales person kept coming to me with a new monthly payment. I told them several times that we were paying cash.

For example, let’s talk about a camper. I would like to get a camper at some point, but I don’t think that we will use it enough to justify the cost. When we are at the camper show they are financing those campers for at least 120 months! That is 10 years. If you pay for something for 10 years, the monthly payment doesn’t seem too bad. For $220 per month you can have this $26,400 camper. That does not include interest…. Then for just $10 more per month, you can have a $1200 feature. You will be underwater on that camper every month as long as you own it.

3) Talk about finances with Friends. People are hush, hush about money. It is important to feel comfortable talking about finances with others. If you don’t talk about it, it is impossible to get advice or other perspectives. Sometimes our personal perspectives are not always the best route. My Dad is a money person, and so is one of my brothers, so we have many discussions about money. I like to talk about it with friends, and hear their perspectives. Just because your Mom and Dad did it one way, doesn’t mean that is the only way.

4) Learn to track your monthly expenses using a computer program. I am a strong proponent of Quicken, there are alternatives out there. I started a couple of years ago, and I should have been doing it all along. People ask me if it has changed my habits on spending, and not so much, but it completely changes the ball game on planning. The thing I learned the most on spending is that it is the little items that are the worst. It is amazing how the $1 to $50 purchases add up to large amounts. I like to go through the spending and determine how much it would take to live each month based on the necessities. We need to eat food, we need a place to stay, and we need heat. If you want to cut back on spending, there will be a couple easy hitters that show up, but it really boils down to controlling the little expenses. This skill is so important that I cannot emphasize it enough. The reason being is that it is something that applies to successful business as well as successful people. Learn to manage money, don’t assume like I did that I just kinda knew what we were spending.

I talk to a lot of people and am surprised at how few people track their spending. Quicken is so fast, I do mine one or two times a month, takes about 10 minutes to keep it up to date. The reason for this is that I have the ability to make decisions, and powerful decisions. For example:

A) We had a child and I was not sure if my wife was going to return to work. Having our spending tracked and categorized I was able to see exactly how this would work. It allows a very clear picture of what it would mean.
B) Emergency fund: I am a big proponent of emergency funds. How much do you need? The only way to answer this question is to understand how much its takes to support the family and then how much it takes if you went into conservative mode.
C) Investments: If you are able to invest money, you can gauge how much you can invest and when.

5) Investing is a key and the time value of money is amazing. Don’t try to time the market, just invest as much of your paycheck as you can every month and let it ride. I tried timing, and I was an idiot. The goal is just keep buying and buying. If the market is falling, great, you get to buy cheap, if the market is rising, great you are making money. Having your expenses tracked will tell you how much you can invest.

6) Do your own taxes. It is worth filling out the Turbo Tax thing even if you still take it to a professional. The $100 of working through the program can be considered an educational expense. The key is that you need to have some understanding so that you can make good decisions. It isn’t always fun but is well worth it. If you really hate it, sit down with someone and tell them your situation at the beginning of the year so that they can help you through it. It is worth paying someone for the advice, even at $100 per hour, there is still a lot of value. For example:
A) 401K Roth vs. Traditional tax savings
B) HSA is important and saves a ton of money
C) Dependent care FSA saves a ton of money
D) Knowing if you take standard deduction or itemize can save you a ton of money. Funny story is that I bought our first house in Texas citing tax reasons. I told the realtor we needed a tax write off (I was using stuff I had heard people say, thinking I was smart), we took a standard deduction every year we lived there.

7) Balance is the key to life. I have a friend who is cheap, I mean cheap. I heard a story on how his car locks didn’t work so when he would buy something at Walmart, he would use zip ties and bungee cords to lock the car doors. I have another friend that is so cheap that he would transport his young kid in a car that was unfit for the road, saving money. They both save a lot of money, one of them is young and has his house PAID off. A 250k house paid off.

Each person has their own strategy, and that is a good thing. The moral of the story is the guy that has his house paid off is so cheap that he won’t take a vacation, he hates his job, and always is a glass half empty type of guy.

What I am trying to get at here is that you need to go back to the most important thing, and that is the ability to assess value. I take vacations, if I look back, those are some of the high points of my life. We went to Alaska, Ireland, the Caribbean, the mountains, etc…. If I take out a photo album, I don’t get excited about talking about pictures of my car parked at work, or what my cubical looks like. That killer whale off the front of the boat in Alaska, or seeing a sea turtle in the crystal clear Caribbean waters are something I get excited about. It is important to get away, and take time to enjoy life. Don’t let being cheap ruin it, that is an important life lesson. At the same time, be realistic with the spending. You need to track your spending, and understand what you can spend on vacations. I would not try to cut it completely out of the budget, but also don’t fly first class.

8) Home owner ship is not all that it is cracked up to be. This is really important. There is a lot of misinformation out there. Here are a couple of key components:
A) Houses are not a great investment: There are exceptions where some folks make it out real good, on the contrary there are plenty were people lose a lot of money. So don’t think you are “Throwing your money away by renting.” The reason is simple, houses have a lot more cost than just a mortgage. They need upkeep such as roofs, plumbing problems, yard work, windows, and people fail to include these in the cost. They also require taxes and insurance. The cost of moving is extremely high. Real estate commission alone will knock out most people’s equity.
B) My rule is simple, if you don’t like doing handy work, are young, and single, RENT!!!!!
C) If you have a family, plan to stay somewhere for a while, and are being realistic with yourself on spending, BUY!!!!!

9) Being cheap is not always the answer to wealth. I personally feel that being cheap has cost me a lot of money. The reason is that knowledge is money, and it is important to always keep learning. Being cheap and not buying the proper tools, or investing in myself will cost me more in the long run than the money I saved. This one is a little harder to wrap your head around.

If you are young, it is very important to learn as much as possible in the primary environment that you make your money, OR in a secondary environment that has the potential for income.

A primary environment example is that as a young person, you can quickly become the EXPERT in a field even within a very large company. The reason being is as people advance in their career they tend to go to management roles that are non-technical. The technical stuff is left to younger employees and is constantly evolving. Older people tend to have kids and more commitments outside of the normal working hours, where young single people can invest more time in learning new tools, concepts, and expertise. When it comes time for promotions or layoffs, the extra knowledge is surely going to help keep you employed, or make you more money. It might be worth spending 10 extra hours a week working on building expertise within your role, than trying to save money by buying a house that needs restoration. I used to make fun of young people with new cars sitting in front of an apartment building, in hindsight, I think that is the most brilliant route to take for young people.

Another example of this is as an engineering student in college, does getting a job at the food service place making $10 an hour make sense? It seems like the young student is being fiscally responsible by working during college to help offset the debt. At the same time if the student is working 15 hours per week, this time could be used for studying or better yet getting involved in an extracurricular engineering activity such as a design competition. The design competition does not pay an immediate salary, it may lead to better job offers, and higher job satisfaction than the $150 per week gained during the food service job. Clearly if the student is not able to maintain greater than a 3.0 GPA, they should clearly focus on studying as opposed to the food service job. Don’t let short term gains impede long term gains.

For a secondary environment example, I should have tried to start my own business on the side instead of trying to fix up my house. I saved a lot of money doing my own housework, but I have always wanted to try to make a business work. With the housework side of things, the most money that I saved is the cost of having someone else do it. For example if a painter cost $50 per hour, and it took them 20 hours, then I saved $1000 doing it myself. The problem is that I took those 20 hours doing a task that will never get me more than $1000, whereas a business could make that weekly. Only do this if you have an opportunity cost that is higher in value. Paying someone $1000 so that I could watch football on TV is not a good use.

Life Insurance and Early Death

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Social Security has a benefit that many people don’t seem to know about. If you are contributing to Social Security and you die and have dependents they are entitled to benefits. You can find more detail of how much those benefits are here at the Social Security website. Like most things it is based on how much you have paid into SS.
Here is probably the most important information to know from talking with friends.

  • Your widow or widower who has not remarried can receive survivor’s benefits at any age if they take care of your child who is under age 16 or is disabled and receives benefits on your record.

Here is a picture from my SS website page of the benefits my wife or children would get.

The reason I am mentioning this is that I have had discussions with at least 2 friends lately about life insurance. Both expressed interest in life insurance because they were having children, or more children and were concerned about their wives being financially stable if they were to die unexpectedly. I think it is great that both of my friends are thinking about their wives futures. That shows a great husband.

Life insurance is something you pay into each month or year and if you die they pay your beneficiaries a lump sum, between $50,00 and $1 million depending on how much you pay each month. There are 2 ways to structure/pay for life insurance.
One friend was considering term life insurance. This is good and cheap insurance! This is life insurance that only covers you for a term of your life, measured in years, 10, 20, 30 years. You pay an insurance company each month, say $50-$200. If you reach the end of the term and you haven’t died, they get to keep all your money but you have not paid a lot in and you can stop paying. Hopefully by that time there is no one who wouldn’t be cared for if you died. Or, they would be able to live of the Social Security money as well as the investments you have accumulated by that time.

Alternatively, the other friend was considering whole life insurance. This is bad and expensive insurance. This insurance can cost $800/month or more! It will have the same payout ($100,000  up to $1 million + depending on how much you pay in). But it will likely have a monthly rate of 10x the term life insurance, or more! This money is then invested by the whole life insurance company in the stock market in the same investments you could invest in yourself. They keep some of the returns and they give you some of the returns as opposed to you getting all the returns if you invested yourself.. Eventually (after 20 or 30 years) the money that your money gains will be able to completely pay for your monthly premium. Whenever you die this money will be paid out to beneficiaries. You can also cash out a whole life policy after a certain amount of time and many whole life policyholders do eventually cash it out before they die because it is such a bad (money losing for policy holder) plan.

Let’s say you pay $100/month for 20 years to a term life policy. That’s a total of $24,000. And you will end up with $0 at the end of 20 years.

But look at whole life insurance, you pay $800//month for 20 years that’s $192,000. Your policy is likely not even worth that much to cash out at that time, or worth only a little more than that.

With the $700 a month you saved with the term life insurance you could have invested that money in a 401k, IRA or a normal brokerage account. That money would have grown much faster than the money you would have paid to the whole life insurance people.

You can get more precise numbers from this website where they have done similar comparisons.

My belief is there is already most of the knowledge we need available we just need to connect people to the knowledge they need. Hence I was not going to do all the calculations over again when someone has already done them for you and me. My goal is to make you aware of the benefits of Social Security for early unexpected death and point you to the calculations others have done countless times to show that term insurance in conjunction with investment of the saved money over whole life is a much better way to use your money than whole life insurance. I suspect and hope that in my lifetime whole life insurance will not be offered anymore because no one will want to buy it because it is such a bad deal for consumers.

What Color is the Sky? A Book Celebration (and review)

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“It’s a wonderful thing to behold when you see someone take control of their finances AND their life.” – Finley

I finished my 2nd read of “What Color is the Sky” this weekend. What Color is the Sky is the 2nd book by a personal friend of mine, Michael Finley. As I said in the title, this is both a review and a celebration of a great book. I believe it is one of the best investment books available because it delivers useful, actionable, information instead of vague concepts. Because of this I have personally bought and given away over 40 copies of this book to friends and family  (and I hope to give more in the future, and that people read them!). A great feature of this book is that each chapter is 2 pages long and covers 1 topic. The book delivers a wealth of information in a short enough read for the average person. The average person doesn’t want to or have time to read 30 pages about stock market bubbles, timing the market or index investing. Finley delivers concise, precise, useful information that shouldn’t tax your attention span.

There are 5 stages in the book.

Stage 1 is simply Finley giving you a pep talk. He wants you to know that you are able to manage your own investing, or at least that you should be able to find someone to help you along but who won’t screw you (like 95% of financial “advisors” (salesmen) these days).

Stage 2 includes a lot of chapters informing you about what smart investing is NOT.
Smart investing is not trying to guess which one stock will do good each month.
Smart investing is not listening to your uncle who is not educated on investing.
Smart investing is not trying to find the best managed mutual fund and changing it each year or two.
Smart investing is not  investing in something because everyone else is (housing bubble, tech bubble, tulip mania).

Stage 3 includes a many chapters informing you about what smart investing IS.
Smart investing is investing in index funds (or target date funds which are made of index funds).
Smart investing means you are diversified through various classes of investments (US, international, bonds, REITS).
Smart investing is understanding opportunity cost, the rule of 72, taxes and different types of account you can save money in (401k, 403b, 529, IRA, ROTH or traditional).
You could skip right to stage 3 of the book if you are really bursting to get the knowledge of what you should do, but if you do you need to go back and read the start of the book. This whole book needs to be read, by everyone and I will buy it for you, if you need me too. As Mike often mentions in the book, he is not paid by Vanguard to promote their product, he just believes they are doing what they do the best. Similarly, I believe Mike is providing the most unbiased, useful, actionable (helps you actually make investment decisions) advice in an easy to understand format.


Stage 4 builds on stage 3 with more practical actionable advice.
Discusses buy and hold (vs selling constantly to buy “winners”), different asset classes such as large capitalization stocks, small capitalization stocks, REITS and bonds.
Discusses international vs domestic stocks.
It also discusses rebalancing your portfolio, asset allocation as well as one of my favorite topics the 1 and done fund, the Target Date Fund.

Stage 5 is rather short. It encourages you to continue your financial education with recommendations of some good books. It encourages you to seek fee-only advisors if necessary.

Finley also uses a chapter to provide his vision for the future. He speaks about institutional investors, who are collectively losing million of our dollars to fund “managers”. Many large state and company investment funds offer poor funds. He wants to change that. We must demand the change and to do that you must be informed.
Finally, Finley encourages you to share what you have learned. As is his life goal, educating and empowering others to become the best they can be, he encourages the readers to help others learn more about investing and personal growth. That is part of what I am trying to do by writing this blog and this post, teaching others what I have learned in hopes that it will make their lives better and ultimately, make the world a better place. Active fund “managers” are generally providing negative value to the world and we need to stop that, so do your part, learn, become educated, get rich and live a rich, fulfilling life.

You can find Finley’s book here on Amazon (as I said I get nothing from this, he doesn’t even know I wrote this until he will see it on Facebook). I will buy you the book if you don’t think you can afford it. Leave a comment below if you’d like me to buy you a copy. You can’t afford to not read this book and I can’t afford for you to not read this book! Changing the way the whole market operates is in my, your and the world’s best interest. Forward to a better future!

You Might Need $3 Million to Retire at Age 65

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You might need $3 million to retire at age 65 (if you are 28 years old today, which I am). See how I came up with that number below.

The purpose of this post is not to scare you into thinking you’ll never save $3 million dollars. It’s to expose you to how to think about how much you need to save for retirement. You might not need $3 million. But how much do you need and how do you calculate that?

Most people have no idea how to save for retirement, how much to save, where to save that money, etc. In everyone’s defense, there seem to be a lot of questions and it seems daunting to learn. But in reality, it is not that difficult to invest your money for retirement. I have already written a blog post about how you should invest in a target date fund in your 401k (as much as you can a year) and call it good. You (may) not need any other investments.

But a good question people should have is “How much do I need to save for retirement?”
If you were to retire today some people say you need $1 million.
That number is created by using the 4% rule, meaning you can withdraw 4% of your money a year to live off of. $1 million x .04 = $40,000 a year to live off of (plus social security).

It can also be called the 25x rule. This means you need 25x the money you will need each year to live saved. If you want to live on $40,000 a year 25 x $40,000 = $1,000,000

This is fine for today’s retirees, but for people between the ages of 20 and 30 we might have a different number to shoot for.

We have to consider inflation. To account for inflation any number of year from now there is a very simple formula.

1.03^37 = 2.98 

(a quick review of powers, 1.03^37 means 1.03×1.03×1.03… 37 times)

$1,000,000×2.98=$2,980,000

What do the above numbers mean?

.03 shows an inflation rate of 3% per each year (which is a historical average of US inflation)

37 = 37 years in the future (when I’ll be 65)

2.98 gives you the answer of how much less money will be worth in those years (inflation).

So 37 years from now it will take $2.98 dollars to buy something that costs $1 today.

So you can take today’s money $1,000,000 and multiply it by the inflation rate 2.98 and get that you’ll need $2,980,000 (or basically $3 million) in 2054 to equal $1,000,000 today.

And that is why you might need $3 million dollars to retire.

So the basic formula

1.03^ (years until you turn 65) x how much you want to live on per year in today’s dollars x 25

Example:

(1.03^37) * $40,000 x 25 = $2,985,226

This means you would need $2.9 million dollars ($3 million) to retire.

Of course, this doesn’t take into account the fact that many basic services of today like food, healthcare, housing, transportation, will likely cost less in the future. You might not need near this much saved! But then again, you might. It never hurts to over plan. If you find yourself in a position with too much money you can always give it away.

I don’t want to scare people away from saving for retirement if they don’t think they’ll have $3 million. As this CNN article says, even though a lot of people say $1 million today the average person who’s 65 only has about $148,000 saved which would be $148,000 x 2.98 = $441,000 if you were to retire in 37 years. Now we agree that like CNN said, $148,000 is probably  a little low, but not starving low. So you likely want to shoot for between $441,000 and $3,000,000. Use the rule of 25x to think about how much you might need to withdraw from your investments but also remember to account for inflation!

If anyone would like to review their own personal retirement numbers with me don’t hesitate to contact me. I really enjoy reviewing these numbers with anyone.

My IRRATIONAL Fear – Short term market collapse

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You NEED to understand that the market is risky, in the short term, but so is every other place to put your money, including under your mattress (inflation risk!). – Axel Hoogland (yes I quoted myself)

My IRRATIONAL fear is a short term stock market collapse (meaning stock prices go down for a year or 2, similar to 2008 market collapse) (Learn about what the stock market is here).I am afraid of this because I am continually telling people to invest their money in the stock market. Most people are already invested in the stock market (but don’t know how their money is being managed or what exactly they are invested in). Some are only invested in bonds (which is risky as you are losing money to inflation). Some will pull their money out of the stock market at the first sign of trouble or market dip, which happens often (dips) but usually the market recovers quickly and they would lose on the gains. When investing in the market people should always ask themselves “What do I need this money for?” You NEED to understand that the market is risky, in the short term, but so is every other place to put your money, including under your mattress (inflation risk!).

My greatest fear is being wrong. I hate to give people incorrect information. It is ok to be wrong on some things. If you recommend someone eat at a restaurant they will be upset with you if they don’t enjoy it they will choose to never eat there again and might just stop taking your advice on restaurants.

If you recommend something to do with investing people’s money, something that they don’t completely understand themselves, and they seem to lose money (even if it is only for a short time and then it comes back in a year or two) they may hate you forever. People will be sure that there was a better option for them to invest their money in. They will not know what that option was, but they will be sure it was better than following your advice.

Someone is is almost always better at doing something for you than you will be at doing it for yourself. Some things require training to learn how to do. Many people do not feel comfortable fixing their own car. They take it to an expert, a mechanic. They don’t feel they have access to the right tools or knowledge (and that’s often true) so they pay someone to do it for them.

Unfortunately many people are happy to let an “expert” manage their money, for a large fee! The problem is these people are not experts, they are “salespeople”! You don’t let the car salesman fix your car and you shouldn’t let a “financial salesman” manage your money. The truth is that as a whole all fund managers will underperform the stock market. This is because of the fees they charge and because they are bad at guessing (yes they are guessing) which companies will perform better than average on any given year. Whenever someone sells a stock remember someone is on the other side of that deal guessing that that stock is going up! As a whole, all managed money will underperform (measured by percent returns to clients after fees) the total amount of unmanaged (index funds) market. Certainly some money managers will pick good and outperform the market and many will underperform and pick worse stocks than the market average, but all charge high fees. That is why index funds generally are the best place to put your money. To further diversify you should put your money in a Target Date fund which automatically transfers your money to bonds (safer investments) as you reach retirement.

A question people often ask is

Q.The stock market is high, should I pull money out of the market?

A. I ask them “What will you do with your money it if you do “pull it out” of the stock market?” The stock market should always be at the highest it’s ever been because the world is growing in population, thus businesses are making more products to sell.

As Mr. Money Mustache recently posted about, there is always a recession coming, so instead of worrying about it, it is better to understand what might bring it about, understand what you are investing in and why, and ride the storm out. A benefit of all this is that if people understand what causes recessions, over spending followed by underspending, we (may) be able to avoid wild cycles and instead keep a nice steady rise in abundance in the future, that is my hope by helping to educate people on “The Stock Market”.

Now that I’ve shared my fear with everyone, and why it’s not a rational fear, you should continue to learn about investing and why it is probably one of the most important things you can understand for yourself and for the world. You can learn more about Target Date Funds (where everyone should start investing) from this post or this video.

Expense Ratio

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If you could make an extra $1,000 a year would you? Of course you would! If you have a retirement account there is a good chance you are “giving away” over $1,000 a year in expenses to your fund adviser. The first thing you should do when you start looking into your investments is understand how much you are paying the people managing your money and how they are getting that money.

There are 2 main ways managers get money from you.

  • Loads
  • Expense ratio

Loads are ALWAYS bad.

Expense ratios are necessary but should always be low, less than 0.3% if necessary (meaning $3/$1000 invested) or less than 0.15% if possible $1.50/$1,000 invested.This is possible at Vanguard and many other places.
There are many places that will charge you a 1% expense ratio, $10/$1,000 invested! That’s 10x more money than places charging 0.1% (which is also very achievable).

Remember the expense ratio is taken out each year also, not only one time.  
Take an example where someone has $100,000 invested in a 401K.
If they are paying a 1% expense ratio they will pay $1,000 that year to their fund manager.
If they were paying a 0.1% expense ratio they would only be paying $100 a year, saving $900 a year! Does that sound important? It is!

In the Example below I share the result of a .2% expense ratio ($2/$1,000 invested per year) vs 0.6% ($6/$1,000 invested per year). You can see after 10 years you end up paying $836 more in fees with the 0.6% expense ratio.

For more information on expense ratios you should watch this video I made on expense ratios. Then you should go into your 401K or other investment accounts and try to find what expense ratio you are paying.