Tags: Steve Forbes | Investment Crisis Summit | Bogel | Shubert

Steve Forbes: Paying Mutual Fund Fees Costs You 60% Of Your Nest Egg

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At a recent investment summit, Steve Forbes, chairman and editor-in-chief of Forbes Media, pulled no punches when he explained why Americans are facing a retirement crisis.

The problem, he said, is that millions of Americans are losing up to 70% of their nest egg to mutual fund fees.

“Well, if you have a 2% fee — and that's not unusual in the mutual fund industry — and you take a 40- to 50-year time horizon, that 2% fee will cut your return in half or by a third. So if you would normally have $100,000, you end up with, say, $30,000 or $40,000 because of what fees have eaten up.”

He added, “So you are really paying not just 2%, over a lifetime, you are paying a 50%-60% fee because of those huge extractions. So again, 2% translates into half or two-thirds, so instead of $250,000 you end up with $100,000. That's real money, and that should be your money, and not somebody else's.”

In an unrelated interview, Jack Bogle, the founder of the Vanguard Group, echoed Forbes’ comments.

Bogle stated, “Do you really want to invest in a system where you put up 100% of the capital, you, the mutual fund shareholder, you take 100% of the risk, and you get 30% of the return?”

“One becomes thoroughly disgusted when one looks at the industry and what it’s charging and what it’s giving back, with the value that you’re getting for your investment. I’d do better to my money in a mattress, it would seem, given some of these fees that people are paying,” he added.

If you are a working American, this should absolutely terrify you. Chances are your retirement account or 401(k) is primarily invested in mutual funds, and unbeknownst to you, Wall Street has quiet siphoned off large amounts of your money.

Fortunately there is a solution, but it’s critical that you take steps today to avoid these costly fees, and salvage your retirement nest egg.

At the investment summit, Steve Forbes discussed the retirement crisis looming for millions of Americans, and was joined by industry veteran John Shubert, who unveiled a revolutionary investment approach.

Shubert’s solution avoids the “permanent flaw” in the mutual fund industry by moving your money out of mutual funds, and into a specific group of stocks that have historically outperformed the market by a 7-to-1 margin, posting a cumulative return of 424% vs. the stock market’s return of 63% (verified by professors at Harvard Business School and the London School of Economics).

You can watch the presentation in its entirety here and discover the solutions you need to protect your nest egg and long-term wealth.



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Steve Forbes: Paying Mutual Fund Fees Costs You 60% Of Your Nest Egg
Steve Forbes, Investment Crisis Summit, Bogel, Shubert
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2015-02-22
Monday, 22 Jun 2015 12:02 PM
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