I think cleanliness is a good thing. I also think there are times in my life where it was a good thing my mom saw to it that I was clean. But, as I grew older, she expected me to take a bath by myself, wash my own hair and try to keep my clothes clean. This was a part of the learning and maturing process. One thing always escaped my notice, as it did not matter to me. The bar of soap grew smaller each time I used it. The change in the size of the bar was very small and very gradual, but each use caused the bar to be ever-so-little smaller. The soap disappeared never to return.

Many think the “expenses” that they are charged for their mutual funds are “OK” and “normal.” It isn’t uncommon for these to be 0.50%-1.00%. However, over time these expenses have a very nasty way of eating into your long-term returns. In fact, just as interest compounds on a savings account, expenses compound in a very undesirable way. This is exacerbated by the charges that are often levied by the “financial adviser” who often wants an additional 1.00% of your total assets as a payment for his/her services.

When your account balance is $10,000, then 1% doesn’t seem like to high a price to pay. As an infant investor, you are willing to pay someone to be your mom and $100 seems fair because you don’t have to do any work and they do it for you. But, just like the bar of soap, each time your adviser washes you, you lose some of your bar.

When you balance is $500,000, and the rate is 1%, the same adviser, for the same amount of work (or very little extra work) will reap $5,000. They will get paid REGARDLESS of whether your account goes up in value or goes down. They will wash you every year of your life, if you let them.

Mom would suggest that you learn to pay yourself the $5,000 and learn how to wash your own investments. I can teach you what you need to know in less than two hours. Would you take two hours of training to save $5,000 per year for every year of your life?

Keep your money. You earned it. Here a little and there a little and before you know it you have earned or SPENT a large pile of the money. May I suggest it might be better to help someone who needs help by giving them a gift (or a charity or church or missionary) instead of seeing it disappear as an “expense”?