How the Rich get Rich

rich people

I can’t locate exactly where I’ve heard this before, but I’ve been told/ read/ listened to the following advice multiple times:

“The biggest killers of investment returns are taxes and fees”

The taxes, well that should be obvious.  It’s the amount you pay to the government.  Income taxes, capital gains taxes, if you don’t plan well you could have to deal with both.  This is why I always talk about retirement plans, and the benefits they offer in reducing one’s tax burden.

Fees, I’m talking about investment fees paid to advisors.  When I first graduated and had money to invest, I thought I was doing a good job of putting money with an advisor.  However, I quickly realized that every “recommendation” they gave resulted in a fee earned by them on the selling of one position and the buying of another.  I eventually took out less money with my advisor than I initially invested and missed about an 18% gain in the stock market during this period.  Lesson learned!  This is why I also recommend Vanguard and their low-cost index funds.

So this leads me to the title of this post… How the Rich get Rich.  Well they look into reducing their biggest killers for investment returns.  Don’t believe me, check out the following article and see for yourself.

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