Mutual Funds: What I Learned About Money From A Gas Station Owner
Before he retired, my cousin, Sam, owned a gas station for many years.
One day I was putting gas in my car. He told me about a customer who wanted some work done on her car. She asked Sam, “Will you take it out in trade?” He said, “Only if you can show me a way to put it in my cash register.”
On that day, I learned that cash is king.
Are you trading your hard-earned money for services that don’t put more money in your pocket?
For instance, if you pay an investment adviser commissions or a fee for his or her advice, shouldn’t the investments that he or she recommends at least match the market’s performance? If they don’t, you will have a large opportunity cost–long term. First of all, I bet that your investment adviser does not have at least a ten-year track record of picking mutual funds that beat a core mix of no load, low cost, index funds in performance. Ask for his or her track record, which should be at least ten years, and you will see the truth.
My point is this. Index funds are designed to match the market’s performance less their cost. Instead of wasting your time in meetings with foolish people, it’s faster, smarter, and easier to invest in a diversified, core, mix of no load, index funds. See?
Beat wishes,
Your teacher, Frank Cirullo
Tags: index funds, IRA accounts, mutual funds
July 24th, 2008 at 4:02 am
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July 24th, 2008 at 9:56 am
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