Dave Ramsey mentioned bogleheads today

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Helo80
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

17outs wrote: Tue Jun 09, 2020 8:40 am I'll say something controversial, but likely truthful. Dave Ramsey has done for many in personal finance what Bogle did for investing. Do I have your attention now? Haha.


I totally agree... no controversy here.

Much like many BHs would not go to DR for investing advice, I would not come to BH for car buying advice. The number of people that think cash is king when car buying, or that you can "market time" a car purchase.... clearly shows that people don't really buy too many cars nor know much about the car market (and these are not necessarily bad things as much like CC debt.... cycling through cars can have a serious impact on long-term wealth accumulation.)
LeslieSmiley
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Re: Dave Ramsey mentioned bogleheads today

Post by LeslieSmiley »

17outs wrote: Tue Jun 09, 2020 8:40 am I'll say something controversial, but likely truthful. Dave Ramsey has done for many in personal finance what Bogle did for investing. Do I have your attention now? Haha.

Srsly though I truly believe that his plan has helped hundreds of thousands if not millions get out of debt. People that needed an easy to follow guide. I hate debt as much as he does, but I just don't hate credit cards as much as he does. I believe in the paid off mortgage and that it provides something even though it may not have been the better investment.

And that is where it ends. His mentality of investing 100% into 4 high fee, growth mutual funds and no bonds for all people is just simply horrible and dangerous advice. Chris Hogan, another program on his power hour follows same but caters more to the folks who are debt free. Lots of valuable info there too, but also sketch investing. I actually believe that Chris Hogan doesn't follow Dave investing 100%.

The irony in this thread for me is that Dave Ramsey followers and Bogleheads are very similar in many ways. The are both very passionate about their stance and have very little empathy for other views. The only difference is credit cards vs market timing or factor investing ;-). You can get booted from the DR forums for saying you use credit cards regularly.
it has nothing to do with passion and empathy, i subscribe to BH investing "principle" because it makes sense and the principle is backed up by historical data. i don't subscribe to ramsey's principle because it has many flaws in regards to the purpose of investing. helping people to get out of high interest debt is certainly good and i give him credit for that. but hailing it as the most important factor to achieve financial independence is simply flawed, not to mention of him pushing high fee mutual funds. these are facts. the bottomline is one should understand and learn about the thing that they are getting themselves involved in and then make an "informed" decision based on their needs and goals. having a cult-like following attitude and advocating it because you are part of it limits their potential for growth and evolution in all aspects.
Last edited by LeslieSmiley on Tue Jun 09, 2020 9:09 am, edited 1 time in total.
Helo80
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

17outs wrote: Tue Jun 09, 2020 8:40 am And that is where it ends. His mentality of investing 100% into 4 high fee, growth mutual funds and no bonds for all people is just simply horrible and dangerous advice.

I think it's less dangerous than staying in debt and only putting superfluous funds in bonds/CDs.
17outs
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Re: Dave Ramsey mentioned bogleheads today

Post by 17outs »

Helo80 wrote: Tue Jun 09, 2020 9:02 am
17outs wrote: Tue Jun 09, 2020 8:40 am And that is where it ends. His mentality of investing 100% into 4 high fee, growth mutual funds and no bonds for all people is just simply horrible and dangerous advice.

I think it's less dangerous than staying in debt and only putting superfluous funds in bonds/CDs.
I can agree with that.
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Re: Dave Ramsey mentioned bogleheads today

Post by 17outs »

LeslieSmiley wrote: Tue Jun 09, 2020 9:02 am
it has nothing to do with passion and empathy, i subscribe to BH investing "principle" because it makes sense and the principle is backed up by historical data. i don't subscribe to ramsey's principle because it has many flaws in regards to the purpose of investing. helping people to get out of high interest debt is certainly good and i give him credit for that. but hailing it as the most important factor to achieve financial independence is simply flawed, not to mention of him pushing high fee mutual funds. these are facts. the bottomline is one should understand and learn about the thing that they are getting themselves involved in and then make an "informed" decision based on their needs and goals. having a cult-like following attitude and advocating it because you are part of it limits their potential for growth and evolution in all aspects.
Of course. I subscribe to Ramseys principle on becoming debt free and to BH principle of low cost passive index investing. For me personally, my investing didn't become successful until I was debt free even though I was investing while I had debt. It wasn't until I was debt free that I could shift into overdrive and pedal down and gain serious strides.

Well said on your cult like following comment!
LeslieSmiley
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Re: Dave Ramsey mentioned bogleheads today

Post by LeslieSmiley »

17outs wrote: Tue Jun 09, 2020 9:17 am
LeslieSmiley wrote: Tue Jun 09, 2020 9:02 am
it has nothing to do with passion and empathy, i subscribe to BH investing "principle" because it makes sense and the principle is backed up by historical data. i don't subscribe to ramsey's principle because it has many flaws in regards to the purpose of investing. helping people to get out of high interest debt is certainly good and i give him credit for that. but hailing it as the most important factor to achieve financial independence is simply flawed, not to mention of him pushing high fee mutual funds. these are facts. the bottomline is one should understand and learn about the thing that they are getting themselves involved in and then make an "informed" decision based on their needs and goals. having a cult-like following attitude and advocating it because you are part of it limits their potential for growth and evolution in all aspects.
Of course. I subscribe to Ramseys principle on becoming debt free and to BH principle of low cost passive index investing. For me personally, my investing didn't become successful until I was debt free even though I was investing while I had debt. It wasn't until I was debt free that I could shift into overdrive and pedal down and gain serious strides.

Well said on your cult like following comment!
so you chose and implemented what made sense and worked for you! :sharebeer
Helo80
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

BTW -- Dave Ramsey has said several times (at least a handful by my ears) that he does buy "no-load S&P500 funds" when he has free money.... and then uses that as his piggy bank when he finds value Real Estate he likes. (yes, he always specifies no-load....) He's very matter of fact that he loves real estate. Though, he has also said that stuff in the last couple of years in his area is just bonkers priced so he's been a bit cool on purchases lately.

I listen to Dave a lot because it's a free podcast on Alexa.
Helo80
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

Helo80 wrote: Tue Jun 09, 2020 9:02 am
17outs wrote: Tue Jun 09, 2020 8:40 am And that is where it ends. His mentality of investing 100% into 4 high fee, growth mutual funds and no bonds for all people is just simply horrible and dangerous advice.

I think it's less dangerous than staying in debt and only putting superfluous funds in bonds/CDs.


Yeah --- I'm not necessarily ascribing this to you, but there are definitely people on this forum that don't realize that smart people, with solid educations and are by all means successful, are not necessarily fans of the stock market or get drawn into the analysis paralysis fears. In that sense, maybe they need Dave's guidance.

I'm sure there are surgeons that are magicians on the OR table, but are terrible or afraid to manage their own money in that risky stock market.
17outs
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Re: Dave Ramsey mentioned bogleheads today

Post by 17outs »

Helo80 wrote: Tue Jun 09, 2020 9:24 am BTW -- Dave Ramsey has said several times (at least a handful by my ears) that he does buy "no-load S&P500 funds" when he has free money.... and then uses that as his piggy bank when he finds value Real Estate he likes. (yes, he always specifies no-load....) He's very matter of fact that he loves real estate. Though, he has also said that stuff in the last couple of years in his area is just bonkers priced so he's been a bit cool on purchases lately.

I listen to Dave a lot because it's a free podcast on Alexa.
It is entertaining to me and helpful to many including me in the past. I just stop at the investing part. The scary aspect of DR is when people stop thinking for themselves and develop a Dave says attitude.
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Re: Dave Ramsey mentioned bogleheads today

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kimura king wrote: Mon Jun 08, 2020 9:33 pm At 13:30 Dave Ramsey says he has never heard a millionaire that says they were held back by an expense ratio
I've never heard of a millionaire who was held back by lighting his cigars with $100 bills, but that doesn't make it a wise move.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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CyclingDuo
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Re: Dave Ramsey mentioned bogleheads today

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LeslieSmiley wrote: Tue Jun 09, 2020 9:02 am...it has nothing to do with passion and empathy, i subscribe to BH investing "principle" because it makes sense and the principle is backed up by historical data. i don't subscribe to ramsey's principle because it has many flaws in regards to the purpose of investing. helping people to get out of high interest debt is certainly good and i give him credit for that. but hailing it as the most important factor to achieve financial independence is simply flawed.
The Boglehead community can bash all it wants. Yet, there are plenty of Bogleheads who do pay an AUM fee, may hold funds in some of their retirement accounts with higher ER fees due to what is offered (or not offered) within those plans and maybe even participate in a more disturbing trend which is...

The amount of threads seen here at Bogleheads during Q4 of 2018 as well as Q1 and Q2 of 2020 of market timing, selling and bailing out due to fear, "I can't take it anymore!", "I can't sleep at night!", "Help! I panic sold and now I want to get back into the market...", etc... exploded.

We could even go back to the last presidential election cycle to read similar threads. Who cares what the ER fee is if one is trading in and out as a self-anointed Boglehead and underperforming a low cost index fund due to all of that panic selling, panic buying, fear, etc...? I wonder how many on threads like these participated in such behavior?

The stay calm and stay the course threads were like crickets from mid-February and through the first months of the pandemic. :shock: , but all the other threads were of the voluminous variety. Obviously, not every Boglehead was participating in threads such as those, nor were they selling. However, pointing out the behavior which we know usually leads to one turning into an average investor (below market returns shown in the color orange below) was taking place on these forums as a result.

Image

Example of what happens when you bail and miss some of the best days (which usually occur near some of the worst days in a cluster and this time was no different)...

Image

I don't recall Ramsey or Hogan encouraging their minions to panic sell, bail out, etc... as they certainly have focused and remained on message of consistent investing and staying the course. Ramsey was ranting through it all about how on sale the market was and to take advantage of it rather than give into it. I had the chance to tune into it quite a bit the past few months - especially during my bike rides to catch a portion of the shows.

That's all obviously a different subject than the ER fees and asset allocation of a typical Ramsey investor compared to a Boglehead, but just saying "those who live in glass houses should not throw stones"...

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! :beer It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

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willthrill81
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Re: Dave Ramsey mentioned bogleheads today

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Xrayman69 wrote: Tue Jun 09, 2020 8:33 am
JoMoney wrote: Mon Jun 08, 2020 10:24 pm Dave Ramsey gives paid endorsements for financial planners selling high-fee/commissioned funds to be in his 'network'.
Maybe there is some behavioral benefit for people who choose to go that route. I know some people enjoy having their money 'guy' or 'gal' to turn to, and seem happily oblivious to what it's actually costing them :confused :annoyed
Im shocked there is gambling in this establishment. (Sarcasm of course)
And how long do we go without a thread in adoration of Bogle?
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Re: Dave Ramsey mentioned bogleheads today

Post by mbasherp »

Dave does his early followers a great service by getting them to understand their expenses and income, learn about assets and debt, and start to get their lives under control.

He continues with some generally good advice about targeting savings rates and being prepared for bumps in the road.

If you make it through all that, he starts extracting his fee through his investing advice and partner referral network. I think that's at least slightly more reasonable than a lot of business models. His is essentially this: I'll give you X and Y for free. Z will benefit me, and hopefully you too.

I don't think he deserves any awards, but I can think of a lot more reprehensible business models out there.
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Re: Dave Ramsey mentioned bogleheads today

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mbasherp wrote: Tue Jun 09, 2020 10:18 am Dave does his early followers a great service by getting them to understand their expenses and income, learn about assets and debt, and start to get their lives under control.

He continues with some generally good advice about targeting savings rates and being prepared for bumps in the road.

If you make it through all that, he starts extracting his fee through his investing advice and partner referral network. I think that's at least slightly more reasonable than a lot of business models. His is essentially this: I'll give you X and Y for free. Z will benefit me, and hopefully you too.

I don't think he deserves any awards, but I can think of a lot more reprehensible business models out there.
Is it clear to the majority of his audience that what he's recommending for Z isn't remotely close to best for them but is really good for him? I really don't think so.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
ValuationsMatter
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Re: Dave Ramsey mentioned bogleheads today

Post by ValuationsMatter »

When have salesmen ever had only the customer's best interest in mind?

I've heard about a good book called something like, Where's the Customer's Yacht.
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Re: Dave Ramsey mentioned bogleheads today

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Helo80 wrote: Tue Jun 09, 2020 8:58 am Much like many BHs would not go to DR for investing advice, I would not come to BH for car buying advice. The number of people that think cash is king when car buying, or that you can "market time" a car purchase.... clearly shows that people don't really buy too many cars nor know much about the car market (and these are not necessarily bad things as much like CC debt.... cycling through cars can have a serious impact on long-term wealth accumulation.)
But DR doesn't (mainly) get bashed because he has a different philosophy on investing, he gets bashed because 1) he recommends things that are not great for the investor, because he has a financial incentive to do so, and this is not clearly disclosed to his audience; and 2) he uses obviously false/misleading advice (like arithmetic average returns of 12%) as part of that pitch. The more appropriate analogy would be if Bogleheads pushed certain car manufacturers/dealers/websites in exchange for commissions, without disclosing the relationship.
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Re: Dave Ramsey mentioned bogleheads today

Post by mbasherp »

willthrill81 wrote: Tue Jun 09, 2020 10:21 am
mbasherp wrote: Tue Jun 09, 2020 10:18 am Dave does his early followers a great service by getting them to understand their expenses and income, learn about assets and debt, and start to get their lives under control.

He continues with some generally good advice about targeting savings rates and being prepared for bumps in the road.

If you make it through all that, he starts extracting his fee through his investing advice and partner referral network. I think that's at least slightly more reasonable than a lot of business models. His is essentially this: I'll give you X and Y for free. Z will benefit me, and hopefully you too.

I don't think he deserves any awards, but I can think of a lot more reprehensible business models out there.
Is it clear to the majority of his audience that what he's recommending for Z isn't remotely close to best for them but is really good for him? I really don't think so.
That's exactly my point. Z is a bad deal. But X and Y are pretty good ones. That's in contrast to a lot of companies who are fleecing customers with X, Y and Z.

Like I said, he doesn't deserve an award, but he's not the worst, either. That doesn't mean I'm a fan.
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hornet96
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Re: Dave Ramsey mentioned bogleheads today

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It is quite fascinating to watch the Dave Ramsey defenders come into these threads and shout his virtues from the mountaintop about helping "train wrecks" of people who don't have the aptitude to understand basic personal finance, and then ignore the intellectual problems with his obvious monetization of those same know-nothing "train wrecks" once they've seen the light that somehow "only he" (his brand) was able to show them.

The issue that I and many BH's have is that If he was truly 100% about helping these "train wrecks" from end-to-end, then he wouldn't go out of his way to bash index investing and misrepresent the data presented to his congregation, which only serves his own interests. This self-dealing is never in good faith disclosed to his followers, and they are instead led to believe that the proponents of index investing are "stupid" and that it's "easy" to pick outperforming active funds just by looking at returns. He literally says this and provides many intellectually dishonest arguments in order to frame his detractors in a negative light as a play on the "train wreck's" emotions. This "business strategy" keeps his customers loyal to his brand.
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

02nz wrote: Tue Jun 09, 2020 10:44 am
Helo80 wrote: Tue Jun 09, 2020 8:58 am Much like many BHs would not go to DR for investing advice, I would not come to BH for car buying advice. The number of people that think cash is king when car buying, or that you can "market time" a car purchase.... clearly shows that people don't really buy too many cars nor know much about the car market (and these are not necessarily bad things as much like CC debt.... cycling through cars can have a serious impact on long-term wealth accumulation.)
But DR doesn't (mainly) get bashed because he has a different philosophy on investing, he gets bashed because 1) he recommends things that are not great for the investor, because he has a financial incentive to do so, and this is not clearly disclosed to his audience; and 2) he uses obviously false/misleading advice (like arithmetic average returns of 12%) as part of that pitch. The more appropriate analogy would be if Bogleheads pushed certain car manufacturers/dealers/websites in exchange for commissions, without disclosing the relationship.

It's a mixture of that, as well as, BHs simply not liking his investment philosophy. I don't think the criticism of being able to "easily" pick a fund that beats the S&P500 is without merit. Rather, these threads regularly turn into DR bash threads.
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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

willthrill81 wrote: Tue Jun 09, 2020 10:21 am Is it clear to the majority of his audience that what he's recommending for Z isn't remotely close to best for them but is really good for him? I really don't think so.

Good luck defining "what is best" for them.

If I were to come here on BH and ask for advice on "How do I get my friends and co-workers to get on-board with the BH philosophy?" --- you and I both know exactly how that is going to go.
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Re: Dave Ramsey mentioned bogleheads today

Post by Nate79 »

Dave Ramsey is about 90% in common with most BH philosophy in many things. Yes he differs from most BH in investing strategy (not all). However, I don't think the average person in the world (not the train wreck in debt up to their eyeballs person) would do better in a BH strategy vs a DR strategy because most people need hand holding - aka advisor and that advisor needs to be paid. How you pay the advisor (load or AUM or fixed fee - it's not both) needs to be decided. The average person out there is making so many financial mistakes involving debt, investing, spending, etc they really need coaching. BH is an extreme minority - it doesn't represent mainstream public in any fashion.

Again in reference to his millionaire study performed by a third party (all details are available in print apparently) being successful financially is not wrecked by having a different investing philosophy and they like most people are not concerned with investing costs. Maybe all those successful people were wrong but still it's true. In everything I have seen DR has been proposing this investing strategy long before there were his recommended Smartvestor pros and his getting a financial incentive from the advisors joining his network (for which DR is very transparent that that financial incentive exists). I believe he truly believes in his investing philosophy. He has recommended it consistently for 30+ years.

But this is hard for BH to accept. When the most popular and impactful personal finance figure proposes something against BH it really flames things around here. Makes it interesting though.

But again, this subject has been going for years discussed adnoseium. There is nothing new about DR opinion for decades.
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Re: Dave Ramsey mentioned bogleheads today

Post by iamlucky13 »

sailaway wrote: Mon Jun 08, 2020 9:43 pm What about the guy with 999,000 who could have been a millionaire with lower fees, though?
The number you noted is $1000 short of a million, but if the fee is 1 percentage point higher than it could be, it's actually a $10,000 difference...for that single year.

And if our investor is earning the returns Dave Ramsey says he should expect, then next year it's an $11,000 difference, and the next year it's a $12,000 difference, and so on...

I agree with others that he has done a lot of good helping people get out of debt, even though his debt snowball approach is mathematically non-optimal. For the most part, out of control debt is a behavioral issue, so compromising on efficiency in favor of a method that provides positive psychological feedback is a useful insight. It also has the benefit by eliminating small cash outflows sooner, it helps people build up an initial, small emergency fund to avoid taking on new, unplanned debt in the middle of their recovery.

In short, Dave Ramsey has a structured method that provides effective help to many people dealing with red ink, but he is the wrong person to listen to for advice about black ink, and appears to have a conflict of interest that affects his investing advice.
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Re: Dave Ramsey mentioned bogleheads today

Post by hornet96 »

Nate79 wrote: Tue Jun 09, 2020 11:57 am [snip] because most people need hand holding - aka advisor and that advisor needs to be paid. How you pay the advisor (load or AUM or fixed fee - it's not both) needs to be decided.
Ok, then why doesn't he point them to Vanguard PAS or another low-cost hand-holder?
Nate79 wrote: Tue Jun 09, 2020 11:57 am I believe he truly believes in his investing philosophy. He has recommended it consistently for 30+ years.
But do his consistent and proven-to-be erroneous beliefs make it good advice? Can't you achieve a similar outcome (small-cap and value tilt) with lower cost investment vehicles - with a lower cost hand-holder as noted above?
Nate79 wrote: Tue Jun 09, 2020 11:57 am But this is hard for BH to accept. When the most popular and impactful personal finance figure proposes something against BH it really flames things around here.
It's not that his investing philosophy is different, it's that the premise his philosophy is based on is verifiably wrong, no matter how strongly he believes in it.

P.S. I'm a huge Chiefs fan myself. So we have that in common. :-)
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Re: Dave Ramsey mentioned bogleheads today

Post by sailaway »

When it comes to paying off debt, DR is upfront about "this isn't the best way mathematically, but it taps into psychology, and so has a better chance of success."

But when it comes to using debt wisely or investing, he suddenly claims that all other methods are stupid.

That is a huge disconnect and reeks of reel them in, then isolate them cult techniques. If, instead, he said, as others have kindly attributed to him, that this is the safest from a psychological perspective, it wouldn't feel so sleazy.
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Re: Dave Ramsey mentioned bogleheads today

Post by 3CT_Paddler »

hornet96 wrote: Tue Jun 09, 2020 10:58 am It is quite fascinating to watch the Dave Ramsey defenders come into these threads and shout his virtues from the mountaintop about helping "train wrecks" of people who don't have the aptitude to understand basic personal finance, and then ignore the intellectual problems with his obvious monetization of those same know-nothing "train wrecks" once they've seen the light that somehow "only he" (his brand) was able to show them.
It is quite fascinating to watch the Dave Ramsey critics that have an exuberant dislike of Dave Ramsey probably as much for his personality and personal views than anything else.

A higher savings rates and financial discipline will overcome a 1% higher ER.

He explicitly says that his advice is the type of advice your grandma gives you. He doesn't hold himself to be a keeper of secret knowledge.

Ramsey is stubborn and someone who comes from a world where you get what you pay for... index investing is very unintuitive for most people and for many entrepreneurs it sounds like a losing strategy.

I don't agree with Ramsey on investing, but he does more for getting the uneducated investor on the right path than Bogleheads does.
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hornet96
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Re: Dave Ramsey mentioned bogleheads today

Post by hornet96 »

3CT_Paddler wrote: Tue Jun 09, 2020 12:57 pm I don't agree with Ramsey on investing, but he does more for getting the uneducated investor on the right path than Bogleheads does.
Just think about how much more he could do for the "uneducated investor" if only he were intellectually honest about his investing advice.
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Re: Dave Ramsey mentioned bogleheads today

Post by LilyFleur »

3CT_Paddler wrote: Tue Jun 09, 2020 12:57 pm
hornet96 wrote: Tue Jun 09, 2020 10:58 am It is quite fascinating to watch the Dave Ramsey defenders come into these threads and shout his virtues from the mountaintop about helping "train wrecks" of people who don't have the aptitude to understand basic personal finance, and then ignore the intellectual problems with his obvious monetization of those same know-nothing "train wrecks" once they've seen the light that somehow "only he" (his brand) was able to show them.
It is quite fascinating to watch the Dave Ramsey critics that have an exuberant dislike of Dave Ramsey probably as much for his personality and personal views than anything else.

A higher savings rates and financial discipline will overcome a 1% higher ER.

He explicitly says that his advice is the type of advice your grandma gives you. He doesn't hold himself to be a keeper of secret knowledge.

Ramsey is stubborn and someone who comes from a world where you get what you pay for... index investing is very unintuitive for most people and for many entrepreneurs it sounds like a losing strategy.

I don't agree with Ramsey on investing, but he does more for getting the uneducated investor on the right path than Bogleheads does.
I think Ramsey does a great job helping people become disciplined with their finances. I think there is room for both Ramsey and Bogleheads in this world. I wonder how many Bogleheads are disciplined financially on their own, and how many have used the Ramsey methods to turn themselves around? I know there are both on this website.
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Re: Dave Ramsey mentioned bogleheads today

Post by CyclingDuo »

Nate79 wrote: Tue Jun 09, 2020 11:57 amAgain in reference to his millionaire study performed by a third party (all details are available in print apparently) being successful financially is not wrecked by having a different investing philosophy and they like most people are not concerned with investing costs. Maybe all those successful people were wrong but still it's true.
I have the White Paper from the study as well as Hogan's book which have been excellent additions to The Millionaire Next Door (which I managed to read yet again during this pandemic to help fill up the time). It's important to understand the methodology of the data collected for Hogan's book to know that it is not based only the Ramsey "tribe".

Phase one contacted 50 randomly chosen sample millionaires to collect qualitative data to help design and shape the survey that was to be sent out in the next phases to collect quantitative data.

Phase two contacted 2000 randomly chosen sample millionaires.

Phase three contacted 8000 Ramsey "tribe" millionaires to compare and contrast with the 2000 non-Ramsey tribe members.

"While a great deal of similarity existed between the two groups, the 2,000 randomly sampled white space responses were given greater emphasis in the book and in validating the working hypothesis when the data diverged."

Phase four was to contact 2000 randomly chosen non-millionaires from the general population who did not have the habits and lifestyles to compare the general population with that of the millionaires.

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Re: Dave Ramsey mentioned bogleheads today

Post by Helo80 »

I think that that Mad Men meme of the main protagonist in the elevator with what I assume is a nobody who says: "I feel bad for you" and the protagonist replies: "I don't think about you at all" can appropriately apply to Dave's relationship with BH.

I'm not wrong. Anytime a BH posts about DR, it usually devolves into this.
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Re: Dave Ramsey mentioned bogleheads today

Post by alfaspider »

Nate79 wrote: Tue Jun 09, 2020 11:57 am Dave Ramsey is about 90% in common with most BH philosophy in many things. Yes he differs from most BH in investing strategy (not all). However, I don't think the average person in the world (not the train wreck in debt up to their eyeballs person) would do better in a BH strategy vs a DR strategy because most people need hand holding - aka advisor and that advisor needs to be paid. How you pay the advisor (load or AUM or fixed fee - it's not both) needs to be decided. The average person out there is making so many financial mistakes involving debt, investing, spending, etc they really need coaching.
The problem is that the advisor charging you that AUM isn't going to stop you from spending. Most advisors just take your money and put in whatever funds they see fit. If you have the discipline to have a high savings rate, you have the discipline to index wtihout an advisor.
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Re: Dave Ramsey mentioned bogleheads today

Post by Fallible »

kimura king wrote: Mon Jun 08, 2020 9:33 pm https://www.youtube.com/watch?v=Jm25gueDHsE&t=1302s
...
At 13:30 Dave Ramsey says he has never heard a millionaire that says they were held back by an expense ratio... ...
Maybe not "held back" but surely slowed down. Did he get into the long-term impact of these expenses and how much longer it would take to make a million?
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Dave Ramsey mentioned bogleheads today

Post by 3CT_Paddler »

hornet96 wrote: Tue Jun 09, 2020 1:04 pm
3CT_Paddler wrote: Tue Jun 09, 2020 12:57 pm I don't agree with Ramsey on investing, but he does more for getting the uneducated investor on the right path than Bogleheads does.
Just think about how much more he could do for the "uneducated investor" if only he were intellectually honest about his investing advice.
It would be fantastic and I agree. What you ascribe to being dishonest, I ascribe to being stubborn. I think people see what they want to see with him (and that may be true on my part as well).

Ramsey made his money from selling books... I think his decision to continue to hold to his investing views are as much about his stubbornness to hold to his original position versus his financial stake with advisors. He had already been a millionaire several times over when he came up with his network.
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Re: Dave Ramsey mentioned bogleheads today

Post by TheDDC »

LilyFleur wrote: Tue Jun 09, 2020 1:07 pm I think Ramsey does a great job helping people become disciplined with their finances. I think there is room for both Ramsey and Bogleheads in this world. I wonder how many Bogleheads are disciplined financially on their own, and how many have used the Ramsey methods to turn themselves around? I know there are both on this website.
Based on how may Bogleheads post about how much long term debt they have amassed right alongside large sums in their investment accounts and think that's "just fine" when they weigh risk (if they even have at all), I believe many here could be better served from Dave Ramsey's advice than we think.

Bottom line: Both DR tribalists and Bogleheads have much to learn about/from one another.

-TheDDC
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Re: Dave Ramsey mentioned bogleheads today

Post by GoldenFinch »

TheDDC wrote: Tue Jun 09, 2020 1:48 pm
LilyFleur wrote: Tue Jun 09, 2020 1:07 pm I think Ramsey does a great job helping people become disciplined with their finances. I think there is room for both Ramsey and Bogleheads in this world. I wonder how many Bogleheads are disciplined financially on their own, and how many have used the Ramsey methods to turn themselves around? I know there are both on this website.
Based on how may Bogleheads post about how much long term debt they have amassed right alongside large sums in their investment accounts and think that's "just fine" when they weigh risk (if they even have at all), I believe many here could be better served from Dave Ramsey's advice than we think.

Bottom line: Both DR tribalists and Bogleheads have much to learn about/from one another.

-TheDDC
Yes. Not a bad idea to have no debt, very low expense ratios for your investments, a high savings rate and you do all this while you live below your means. Oh, and NO whole life insurance. How’s that? :happy
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Re: Dave Ramsey mentioned bogleheads today

Post by Mudpuppy »

The Broz wrote: Tue Jun 09, 2020 7:45 am In fairness - you need to think about the audience that he is serving. Listen to the trainwreck calls of people who have done horrible things with their lives and their money. Dave gives them a strategy to get out of debt and invest to start building wealth. Take his advice on credit cards as an example. Obviously for those of us who have self control and can pay the bills off each month, there is nothing wrong with credit cards. But he is vehemently against them, as you can tell many callers simply cannot control themselves. The money in their pockets burns them up, and they can't say no to buying something that the TV told them to. For these people, they could do worse (and have) by following his advice - even the investment advice.
I agree with this. I don't think Ramsey's investment advice is good, but his target audience are people heavily in debt who need a very absolute and hard line to make it out of the debt phase. They aren't anywhere even close to being able to think about the investment phase. Hopefully, once they do make it out of debt, they will be more fiscally mature and seek out different sources of advice for investments. But even if they don't, they'll still be better off fiscally than those who are living deep in debt.

Personally, I watched a lot of Suzy Orman and Gail Vaz-Oxlade when I was in grad school, and that helped shape my mindset to come out of that particular debt phase without too much frivolous spending, but some people connect better with Ramsey and if it helps them control their spending and get out of debt, all the better for them.

The reality is that most Americans will remain in debt up to their proverbial eyeballs, so whatever famous personality they latch on to that gives them some resolve to attempt to get out of debt is not to be discounted. It's better than the alternative.
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Re: Dave Ramsey mentioned bogleheads today

Post by Mr.BB »

I am so glad I wasn't the only one who heard him this morning. He basically says that your expense ratio includes all the other fees and that he usually only buys A shares. I would of love to of called him and his sidekick this morning to discuss this; of course I'm sure they would never let you through to discuss the real numbers. I found it funny and sad that he said all that matters is the total return. He didn't say total return after taxes and expenses. Also, to say that after interviewing 10,000 millionaires none of them talked about expense ratios I bet is crap. Of course an easy way to make sure they don't discuss it is not to ask them about it!
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
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Re: Dave Ramsey mentioned bogleheads today

Post by Jags4186 »

Mr.BB wrote: Tue Jun 09, 2020 2:43 pm I am so glad I wasn't the only one who heard him this morning. He basically says that your expense ratio includes all the other fees and that usually only buys A shares. I would of love to of called him and his side kick this morning to discuss this; of course I'm sure they would never let you through to discuss the real numbers. And to say that after interviewing 10,000 millionaires none of them talked about expense ratios I bet is crap. Of course an easy way to make sure they don't discuss it is not to ask them about it!
Oh, he'd discuss it. He'd cut you off, call you a math nerd, and then say that you're worried about expense ratios when the biggest problem isn't the expense ratio but people not saving.
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Re: Dave Ramsey mentioned bogleheads today

Post by Mr.BB »

Jags4186 wrote: Tue Jun 09, 2020 2:45 pm
Mr.BB wrote: Tue Jun 09, 2020 2:43 pm I am so glad I wasn't the only one who heard him this morning. He basically says that your expense ratio includes all the other fees and that usually only buys A shares. I would of love to of called him and his side kick this morning to discuss this; of course I'm sure they would never let you through to discuss the real numbers. And to say that after interviewing 10,000 millionaires none of them talked about expense ratios I bet is crap. Of course an easy way to make sure they don't discuss it is not to ask them about it!
Oh, he'd discuss it. He'd cut you off, call you a math nerd, and then say that you're worried about expense ratios when the biggest problem isn't the expense ratio but people not saving.
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Re: Dave Ramsey mentioned bogleheads today

Post by Longdog »

sailaway wrote: Mon Jun 08, 2020 9:43 pm What about the guy with 999,000 who could have been a millionaire with lower fees, though?
I know that guy. Walks around constantly saying to anyone who will listen, "if it weren't for those darn expense ratios, I'd be a millionaire!" Very sad.

I guess what Dave said was true. :D
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Re: Dave Ramsey mentioned bogleheads today

Post by nolesrule »

3CT_Paddler wrote: Tue Jun 09, 2020 12:57 pm
A higher savings rates and financial discipline will overcome a 1% higher ER.
The higher savings rate and financial discipline comes from following the personal finance advice while the 1% higher ER comes from following the investing advice.

One can do one without the other, so in the proper comparison one would be unable to overcome the higher ER.
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Re: Dave Ramsey mentioned bogleheads today

Post by Stinky »

Jags4186 wrote: Tue Jun 09, 2020 2:45 pm
Mr.BB wrote: Tue Jun 09, 2020 2:43 pm I am so glad I wasn't the only one who heard him this morning. He basically says that your expense ratio includes all the other fees and that usually only buys A shares. I would of love to of called him and his side kick this morning to discuss this; of course I'm sure they would never let you through to discuss the real numbers. And to say that after interviewing 10,000 millionaires none of them talked about expense ratios I bet is crap. Of course an easy way to make sure they don't discuss it is not to ask them about it!
Oh, he'd discuss it. He'd cut you off, call you a math nerd, and then say that you're worried about expense ratios when the biggest problem isn't the expense ratio but people not saving.
Yes, that’s right. He’s a trained radio personality. He owns the microphone and the platform. He holds the “kill” switch to cut off your call.

And he would have the final word. I guarantee it.
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Re: Dave Ramsey mentioned bogleheads today

Post by willthrill81 »

For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.
To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62
Image
By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Dave Ramsey mentioned bogleheads today

Post by Shael_AT »

DR Podcast is some good personal finance casual listening.

I can't stand, though, the people who say "Because Dave Says So" as their basis for reality. [Off topic comment removed by admin alex] Glad to see so many people who budget and get out of debt as a result, but it feels like we have a critical thinking, logic and personal finance failure in our society. I'm concerned where else this reverberates into, but I gather you don't need too much of an imagination to guess.
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Re: Dave Ramsey mentioned bogleheads today

Post by Nate79 »

willthrill81 wrote: Tue Jun 09, 2020 2:55 pm For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.
To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62
Image
By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!
Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.
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Re: Dave Ramsey mentioned bogleheads today

Post by willthrill81 »

Nate79 wrote: Tue Jun 09, 2020 3:16 pm
willthrill81 wrote: Tue Jun 09, 2020 2:55 pm For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.
To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62
Image
By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!
Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.
But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Dave Ramsey mentioned bogleheads today

Post by Forester »

CMH Cost Matters Hypothesis is King. An extra 0.2% negatively compounded will kill any tilt or strategy.

Ramsey is probably aware of the criticism, and aware of the mountains of evidence, but he's too stubborn to recommend low cost index funds over his 12% growth funds.
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Re: Dave Ramsey mentioned bogleheads today

Post by 02nz »

3CT_Paddler wrote: Tue Jun 09, 2020 12:57 pm He explicitly says that his advice is the type of advice your grandma gives you.
Sure, if grandma is getting kickbacks for her advice and not telling you about it!
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Re: Dave Ramsey mentioned bogleheads today

Post by 02nz »

Forester wrote: Tue Jun 09, 2020 3:34 pm CMH Cost Matters Hypothesis is King. An extra 0.2% negatively compounded will kill any tilt or strategy.

Ramsey is probably aware of the criticism, and aware of the mountains of evidence, but he's too stubborn to recommend low cost index funds over his 12% growth funds.
I suspect it's not a matter of personality but of financial incentives.
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Re: Dave Ramsey mentioned bogleheads today

Post by Nate79 »

willthrill81 wrote: Tue Jun 09, 2020 3:21 pm
Nate79 wrote: Tue Jun 09, 2020 3:16 pm
willthrill81 wrote: Tue Jun 09, 2020 2:55 pm For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.
To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62
Image
By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!
Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.
But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.
Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

Loads, AUM, or fixed fee is how you pay your advisor. This should be a separate discussion than expense ratios. There are good advisors out there (Rick Ferri for example) and they don't work for free. Their time, advise, planning, tax advice, etc whatever they are doing costs and it costs a lot.
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Re: Dave Ramsey mentioned bogleheads today

Post by TheDDC »

willthrill81 wrote: Tue Jun 09, 2020 3:21 pm
Nate79 wrote: Tue Jun 09, 2020 3:16 pm
willthrill81 wrote: Tue Jun 09, 2020 2:55 pm For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.
To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62
Image
By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!
Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.
But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.
Exactly. I could sort of understand DR's argument (or non-argument, really) if fees were "only" x% compounded annually. However, when he's talking about class A shares as he does in this video, front loaded funds, then the sky is the limit on the fees theoretically, right? Then we would need to be specific about how much is contributed and at what frequency since 5.75% on $1,000 per month would be a higher amount than on $500 per month, but less than on $1,000 contributed bi-weekly.

Class A shares are just bad news since the front loads are much more regressive. I know this because I used to pay these loads in my Ameriprise days. When I found out that the "good" funds didn't necessarily need to have front loaded fees I was pretty hacked off.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
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