Making money and saving money is hard. But if you have some money and some time then you can do some amazing things like compounding your money or what Albert Einstein referred to as the 8th wonder of the world. But compounding can work both ways. Carrying credit card debt at predatory rates month after month is reverse compounding. Not knowing you’ve become that little mouse running on a wheel at Petco is painful.
The average hedge fund, for example, charges 2% on your assets per year and then takes 20% of your profits. The average mutual fund charges 1.33% on assets, according to Morningstar. I think a fair shake for investors is a manager that charges 1% or lower. As you can see in my example that’s an easy way to make $175,000.