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Patrick McKenzie@patio11• over 6 years ago

Jack Bogle passed away. If his is a new name for you: when you retire, he'll have been directly responsible for about $1 of every $2 you receive from your investment returns or pension, by negotiating down by 95% fees the financial industry charged for no good reason.

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Patrick McKenzie@patio11• over 6 years ago
Replying to @patio11

The fee is the management fee for mutual funds, which were clustered in the ~2% region when they were principally actively managed by stock pickers who purported to deliver above-market performance. This promise was not true. Bogle popularized a better product costing 10 bps.

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Patrick McKenzie@patio11• over 6 years ago
Replying to @patio11

The difference between 2% and 10bps is approximately a quarter of the returns to capitalism, which compounded over a 35 year working career work out to about 2X difference. (Being somewhat handwavy on the math in the interest of general legibility.)

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