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by jcampbell1 1612 days ago
It can be hard convincing people that 1% is a big number. I assume that you are on average going to see 6-7% return after inflation. The 1% represents 15% of the return. So you give the tax collector 25% and the money manager another 15%. You can defer the taxes but the manager gets theirs once a quarter.

When you are in the $1m+ AUM, it is pretty easy to explain. You are going to be paying for your kids to go to college and one of theirs as well. Make sure you really like them.
2 comments
bonestamp2 1611 days ago
> It can be hard convincing people that 1% is a big number.

It's true. My mom only has about $1 million saved for her retirement, which sounds big to anyone who hasn't done retirement planning, but it's really not enough. Growth aside, that's $50k/yr for 20 years. She's paying her advisor 2%/yr. That's $20k/yr, which is a big percentage of her annual income, and he does almost nothing. It makes me sick.

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zie 1612 days ago
After you get over 1M+ AUM, your advisor should seriously think long and hard about lowering their fees, many will go down almost in half(.5%ER). Still high, but if you really desire hands-off do everything for me, it's reasonable.

Once you get to 30M+ invested NW, you can seriously think about a multi-family office and > 100M+ a family office just for you starts making sense.

Most people will have a hard time getting over 1M before retirement, so I left the other options off my original post.

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