A 1% Difference in Return

A mere 1% may not sound like a big difference, but over a lifetime, the difference is radical.

Let's say you had two people who at 20 years old had $100,000.

One person is earning 9%, the other 10%.

This is what their balance would look like over a lifetime.

The difference becomes greater the longer the investment compounds, but after 40 years - a typical career - the difference is already ~$1.4 million! The person who earned 10% has accumulated 44% more money than the person who earned 9%.

Now consider that it is common for people to lose 1% to fees by either choosing the wrong investments or, perhaps worse, paying a financial advisor to manage their investments. This really underscores the value of a DIY approach with low-cost index funds!