June 27, 2011
Don't Throw Your Money Away
There was a time when access to the stock market was limited and if you wanted to participate, you paid a stockbroker, period.
In 1975, Congress deregulated the stock market by taking away the power the NYSE had to force its members (the brokerage firms) to charge fixed rates. This opened up the stock market to discount brokerage firms and Charles Schwab was the first. Fidelity was not far behind.
Still today, some 36 years later, some people assume that if they invest, they must pay a stockbroker or financial advisor basically the same rates they did decades ago. Wow.
Now with the aid of the Internet for research and access, there is absolutely no reason for anyone to pay someone else to invest on their behalf.
Just remember that a 1% fee on a portfolio of 100k will cost you over 200k over a thirty year span (thats with average growth of 8%). If you like your stockbroker that much, great, buy him a car !!! (and save yourself a fortune). Better still, hire the person who cares the most about your money - YOU !!! (and save even more).
Posted by Scott Barclay