beware of feesBen Franklin was a great financial advisor. He understood that a dollar saved was truly a dollar earned. Don’t squander your hard earned money, and that means avoiding non-productive costs, fees and hidden charges imposed on you by your “trusted financial advisors.”

Most actively managed funds under-perform passive funds by at least the total amount of costs. Remember that costs create a negative compounding effect. If you foolishly spend on wasteful fees you are not only spending the immediate dollars but you are also forfeiting all those dollars you would ever earn in the future.

Make sure that your investment calculations always include the impact of fees and all costs. A 2% management fee sounds innocent enough. But, let’s add it up. Assume you have a million dollars under management. That is $20,000 per year and after 10 years you have spent $200,000 of the million just on the management fee which generally does not include the additional cost of individual trades(unless carefully negotiated).

And what do you get for your money? Passively managed funds are almost always, over time, better than actively managed funds. This is so well established that there can be no reasonable debate to the contrary. There have been endless studies which confirm the futility of active managers’ efforts to beat the markets on a CONSISTENT basis. A Vanguard study found that, over a 10 year period, 84% of actively managed US large blended funds underperformed their index. Bond funds posed an even more stark contrast over the same time frame, with 95% underperforming their indexes.

Markets give and markets take away. You can’t control world events or predict the pattern of gyrating markets. You can control, or at least reduce, many costs. Insist on transparency. Evaluate. Manage. Control.

To learn more about Dale Ledbetter, visit his website at