Need some help, financial/mathematician dawgs...

[JungleRecon]

If I have a 401k and and my fees are as follows. An index fund will cost me .77 per 1000 invested and a managed fund will cost me 3.21 per 1000 invested. Lets say over the that time span the managed fund returns at 12% and the index returns at 10% If you are putting in say, 1000.00 a month how much is the difference in the end, would it be a couple 100K or am I missing the boat somewhere? Or if anyone has a fee based planner that could answer my question that would be good too. I know I=PRT and that is about the breadth of my interest skills.

 

[OlecountryDawg]

Are you doing before or after tax ?

 

[JungleRecon]

Before

 

[benchwarmerdawg]

have to know how long you are talking about. Also are you saying the fund expense is .77 and 3.21 or are you saying this is an upfront load with no management expense going forward? The difference being the management expense is paid on the balance on the amount of money in the fund and a load is paid on the amt of new money deposited.

 

[UgaTom]

If I have a 401k and and my fees are as follows. An index fund will cost me .77 per 1000 invested and a managed fund will cost me 3.21 per 1000 invested. Lets say over the that time span the managed fund returns at 12% and the index returns at 10% If you are putting in say, 1000.00 a month how much is the difference in the end, would it be a couple 100K or am I missing the boat somewhere? Or if anyone has a fee based planner that could answer my question that would be good too. I know I=PRT and that is about the breadth of my interest skills.

You don't need to know any of that. All you need to know is that an index fund will probably generate as good a return as the managed fund. You don't pay money managers to generate outstanding returns; you pay them to take the pressure of being the financial decision-maker off of you.