How to calculate the effect of expense ratio on retirement savings?

[magicrat]

I admit it is not always a clear-cut issue and that ethics are not absolute. However, in my view there are some pretty obvious examples of industries and companies causing massive amounts of suffering to humans and other animals, without providing much value to anyone. I don't really care to debate specific companies or industries here, so just to give one example that I hope we could agree on: chattel slavery in the United States. If I lived during the 1800s, I would want to avoid investing in the slave trade as much as possible. How do you feel about that?

I'm against slave labor because I believe that in a truly free market, individuals should be free to choose, whether it be where they are employed and/or what products they buy. Slavery is forced/coercion which is the antithesis of freedom and should not be tolerated in a free society.

Agreed. And many existing companies and industries cause great harm to people who are not free to choose whether to receive that harm. I would prefer to reduce my investment in those companies and industries if possible, in the same way that I would prefer to reduce my investment in the slave trade if I lived in the 1800s. Ideally people would not choose to harm each other for profit, or we would at least have better laws for preventing harmful business practices. But in the absence of that reality, I feel the least I can do is not to invest in the most obvious examples of harmful business.

So, you want to avoid investing in companies that benefit from slave labor, yet you want to invest in a fund whose top holding is Apple? Very curious.

[Rom]

So, you want to avoid investing in companies that benefit from slave labor, yet you want to invest in a fund whose top holding is Apple? Very curious.

I haven't thoroughly researched the various ESG funds available, I just included three different funds in my original post as examples for comparing cost ratios.

Also, I doubt there is going to be any perfect index fund or any perfect investment portfolio. My interest is whether there is a fund that is significantly less harmful than the alternatives, without a prohibitively high cost ratio. I still don't know whether this is the case.

Again, the purpose of my original post was to learn more about comparing cost ratios. I included my ethical investing motivation for context. Perhaps this was a mistake, as far as keeping the thread on topic.

[Abe]

This the way I do it using HP10B calculator.

Assuming I could get an 8% return before expenses and I invest $100k for 30 years:

My net return for VTI would be 7.97% (8% less .03%ER) Future Value = $997,913

My net return for ESVG would be 7.91% (8% less .09%ER) Future Value = $981,141

My net return for VEGN would be 7.40% (8% less .60ER) Future Value = $851,390

[Rom]

This the way I do it using HP10B calculator.

Assuming I could get an 8% return before expenses and I invest $100k for 30 years:

My net return for VTI would be 7.97% (8% less .03%ER) Future Value = $997,913

My net return for ESVG would be 7.91% (8% less .09%ER) Future Value = $981,141

My net return for VEGN would be 7.40% (8% less .60ER) Future Value = $851,390

Thanks for those examples. Using the tools and resources provided by previous replies in this thread, I've been looking at around 80 years, as I'm fairly young and the other replies have impressed on me the importance of looking as far ahead as possible.

[ruralavalon]

Welcome to the forum .

. . . . .

. . . . I would like to focus only on the effect of expense ratio on earnings.

Thank you in advance for any insights you can provide.

The SEC Mutual Fund Cost Calculator.

[Rom]

Welcome to the forum .

. . . . .

. . . . I would like to focus only on the effect of expense ratio on earnings.

Thank you in advance for any insights you can provide.

The SEC Mutual Fund Cost Calculator.

Saved the link, thanks!

[rkhusky]

For a quick estimate, I just use (1 + P)^N - 1, where P is the difference in percentages as a decimal and N is the number of years you are compounding over.

Example: 0.5% difference in ER over 30 years results in 16% less money.

[gatorking]

For a quick estimate, I just use (1 + P)^N - 1, where P is the difference in percentages as a decimal and N is the number of years you are compounding over.

Example: 0.5% difference in ER over 30 years results in 16% less money.

Still requires a calculator. P*N is close enough in a pinch.