Here is one of my favorite posts from 2013. I recommend that you re-read it prior to visiting your Financial Advisor to review your 2013 investment results, financial goals, and risk tolerance.
There are two important ratios that most individuals do not pay enough attention to. In fact, the financial services industry rarely, if ever, makes mention of them. They are as follows:
– The first ratio measures the amount of your investment fees paid versus the total federal, state, and local income taxes you pay.
– The second ratio measures the amount of investment fees paid versus your total income.
Why are these two ratios so important? First, they bring to your attention the absolute dollar amount of investment fees paid to your Financial Advisor, your brokerage firm, and other third parties. Second, you will note that, although you cannot choose to ignore paying your income taxes, you can lower the total amount you spend on financial and investment advice. Lastly, you can think about what other uses you might have for the money you spend currently on investment fees either…
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