1 00:00:07,949 --> 00:00:13,539 Suze: September 7th, 2025. Welcome everybody to the Women and Money podcast, 2 00:00:13,590 --> 00:00:17,879 Suze: as well as everybody smart enough to listen. Suze O here, 3 00:00:18,069 --> 00:00:22,309 Suze: and today is Suze School. But before I tell you 4 00:00:22,309 --> 00:00:26,600 Suze: about Suze School, tomorrow is September 8th. Did you know that? 5 00:00:26,709 --> 00:00:30,450 Suze: Of course you did. But did you also know that tomorrow, 6 00:00:30,670 --> 00:00:35,630 Suze: 15 years ago, Miss Travis and I got married in 7 00:00:35,630 --> 00:00:36,950 Suze: South Africa. 8 00:00:37,418 --> 00:00:42,860 Suze: So we will be celebrating our 15th wedding anniversary, and 9 00:00:42,860 --> 00:00:44,860 Suze: you may be thinking, but Suze, 10 00:00:45,840 --> 00:00:50,360 Suze: Gay marriage wasn't legal in 2010. Oh, it most certainly 11 00:00:50,360 --> 00:00:55,150 Suze: was in South Africa, and we happened to be there. 12 00:00:55,240 --> 00:00:59,709 Suze: I was speaking there, and we decided, let's just get married. 13 00:00:59,919 --> 00:01:02,979 Suze: And it wasn't until five years later, really that in 14 00:01:02,979 --> 00:01:08,080 Suze: the United States marriage equality came to be, but it 15 00:01:08,080 --> 00:01:11,949 Suze: is also possible if we are not diligent, everybody. 16 00:01:12,400 --> 00:01:17,599 Suze: Marriage equality in the United States may disappear, so do 17 00:01:17,599 --> 00:01:20,959 Suze: not take anything for granted. 18 00:01:22,089 --> 00:01:26,199 Suze: So now, before I go into Suze School, just want 19 00:01:26,199 --> 00:01:29,940 Suze: to make a few comments on these markets. 20 00:01:30,819 --> 00:01:33,899 Suze: Yes, they are volatile. They are going up. They are 21 00:01:33,900 --> 00:01:37,389 Suze: going down, and I will be the first to tell 22 00:01:37,389 --> 00:01:41,059 Suze: you that many of you most likely are going to 23 00:01:41,059 --> 00:01:46,500 Suze: get scared. And why? Because these are scary times and 24 00:01:46,500 --> 00:01:50,860 Suze: these markets can absolutely go down. They could go down 25 00:01:50,860 --> 00:01:53,089 Suze: another 10%. Why? 26 00:01:53,620 --> 00:01:56,750 Suze: Because of the tariffs, we don't know about them still, 27 00:01:57,040 --> 00:02:00,519 Suze: all the lawsuits that are happening in the United States 28 00:02:00,519 --> 00:02:05,510 Suze: of America, the possibility of a government shutdown, what's going 29 00:02:05,510 --> 00:02:10,758 Suze: on with Gaza, with Ukraine, there are many scary things 30 00:02:10,758 --> 00:02:12,029 Suze: happening out there. 31 00:02:12,850 --> 00:02:17,490 Suze: So, of course, you possibly could be reading the headlines 32 00:02:17,490 --> 00:02:20,649 Suze: and going, oh my God, we're in another bubble, everything's 33 00:02:20,649 --> 00:02:22,160 Suze: going to just crash. 34 00:02:22,880 --> 00:02:23,490 Suze: And 35 00:02:24,619 --> 00:02:29,070 Suze: Will it, will it not? I don't think so, but 36 00:02:29,070 --> 00:02:31,288 Suze: I do think it is possible. 37 00:02:31,770 --> 00:02:34,399 Suze: That between now and maybe even the end of the year, 38 00:02:34,470 --> 00:02:40,190 Suze: who knows that these markets could go down. However, it 39 00:02:40,190 --> 00:02:43,350 Suze: is not unusual like with the internet bubble, and we're 40 00:02:43,350 --> 00:02:45,820 Suze: not in a bubble right now, believe it or not, 41 00:02:46,070 --> 00:02:49,508 Suze: but I am begging you for you to know that 42 00:02:49,508 --> 00:02:53,110 Suze: this near term volatility that we're all going to experience 43 00:02:53,110 --> 00:02:58,029 Suze: that's ahead of us is essentially a buying opportunity, and 44 00:02:58,029 --> 00:02:59,910 Suze: it is not the start 45 00:03:00,270 --> 00:03:05,820 Suze: of a bear market. Do you hear me? And that 46 00:03:05,820 --> 00:03:08,289 Suze: the truth of the matter is, all right, so maybe 47 00:03:08,500 --> 00:03:11,419 Suze: we won't end the year at 7,000. Maybe we're gonna 48 00:03:11,419 --> 00:03:14,460 Suze: end it with the S&P at around 6500. OK. 49 00:03:15,190 --> 00:03:20,339 Suze: But I can tell you, in my opinion, in 2026 50 00:03:20,869 --> 00:03:27,740 Suze: we're really going to see AI be adopted everywhere, just everywhere, 51 00:03:28,229 --> 00:03:31,509 Suze: you know, technologically speaking we're far. 52 00:03:31,875 --> 00:03:35,274 Suze: Advanced really if you think about it than we were 53 00:03:35,274 --> 00:03:39,085 Suze: in the 90s when the internet was just coming about. 54 00:03:39,434 --> 00:03:43,425 Suze: All of us now on some level do chat GPT. 55 00:03:43,554 --> 00:03:47,994 Suze: We're aware of all of this. Google everything, it's all AI. 56 00:03:48,529 --> 00:03:53,070 Suze: So it's just started to be adopted and very shortly, 57 00:03:53,270 --> 00:03:57,110 Suze: especially starting next year, we're going to see it be 58 00:03:57,110 --> 00:04:02,229 Suze: bigger and better in my opinion than anything that happened 59 00:04:02,229 --> 00:04:05,509 Suze: with the internet. So I'm just going to repeat right now. 60 00:04:06,320 --> 00:04:10,839 Suze: Don't be afraid of volatility. Make sure you keep cash 61 00:04:10,839 --> 00:04:16,309 Suze: on the sidelines. If things go down. Opportunity to buy, 62 00:04:16,600 --> 00:04:21,039 Suze: but this is not, this is not the start of 63 00:04:21,040 --> 00:04:21,600 Suze: another 64 00:04:22,295 --> 00:04:28,325 Suze: market in my opinion, OK, just think about that. All right. 65 00:04:28,584 --> 00:04:31,734 Suze: Are you ready for Suzy school? Let's take out your 66 00:04:31,734 --> 00:04:35,755 Suze: Suze notebooks because today I'm gonna have some numbers for 67 00:04:35,755 --> 00:04:37,445 Suze: you so you can compare. 68 00:04:38,649 --> 00:04:41,808 Suze: A little bit ago, actually on August 29th. 69 00:04:42,630 --> 00:04:46,869 Suze: Somebody by the name of Dr. E wrote in, and 70 00:04:46,869 --> 00:04:49,510 Suze: this is what he said, because at the end of 71 00:04:49,510 --> 00:04:52,099 Suze: his email he says one of the men smart enough 72 00:04:52,100 --> 00:04:52,859 Suze: to listen. 73 00:04:53,630 --> 00:04:58,859 Suze: He says, Dear Suze and KT, I recently noticed that 74 00:04:58,859 --> 00:05:04,859 Suze: my husband's workplace retirement account is committing highway robbery when 75 00:05:04,859 --> 00:05:06,890 Suze: it comes to fees. 76 00:05:07,899 --> 00:05:10,470 Suze: Now, the reason that I've chosen this to do a 77 00:05:10,470 --> 00:05:13,708 Suze: Suze School out of it is that there are many 78 00:05:13,709 --> 00:05:17,988 Suze: of you out there that have a 401k, a 403B, 79 00:05:18,109 --> 00:05:20,779 Suze: a TSP plan at work. 80 00:05:21,678 --> 00:05:27,488 Suze: And do you know the fees that your employer is 81 00:05:27,488 --> 00:05:33,058 Suze: charging within your 401k plan by the mutual fund that 82 00:05:33,059 --> 00:05:37,690 Suze: they've allowed you to choose, and you need to know 83 00:05:37,690 --> 00:05:39,779 Suze: because here's an example of it. 84 00:05:40,970 --> 00:05:45,470 Suze: There are very few funds, he says, to be chosen from, 85 00:05:45,678 --> 00:05:51,559 Suze: and the lesser evil in the group is AANTX, which, 86 00:05:51,640 --> 00:05:57,250 Suze: by the way, everybody stands for the American 2060 Target 87 00:05:57,250 --> 00:06:01,950 Suze: Date Retirement Fund Class A. Now before I even go on, 88 00:06:02,160 --> 00:06:06,440 Suze: you know, I don't like target date retirement funds, and 89 00:06:06,440 --> 00:06:10,239 Suze: I'm going to show you why in just a few seconds, OK. 90 00:06:11,149 --> 00:06:11,600 Suze: So 91 00:06:12,529 --> 00:06:20,440 Suze: The group AANTX charges a 5.75% load on the front 92 00:06:20,440 --> 00:06:27,519 Suze: end and has an expense ratio of 0.73%. Can you 93 00:06:27,519 --> 00:06:34,880 Suze: all write that down? A front end load of 5.75%. 94 00:06:35,540 --> 00:06:41,470 Suze: And an annual expense ratio of 0.73%. 95 00:06:42,299 --> 00:06:46,119 Suze: He says this seems insane to me and may be 96 00:06:46,119 --> 00:06:51,250 Suze: even unethical. His employer only does a 3% match anyway. 97 00:06:51,450 --> 00:06:55,769 Suze: Is it worth it given the exorbitant fees, or should 98 00:06:55,769 --> 00:06:57,450 Suze: we just stick with the Roth, 99 00:06:58,035 --> 00:07:03,565 Suze: on principle instead of paying those crazy fees. Now just 100 00:07:03,565 --> 00:07:07,605 Suze: to answer, Doctor E quickly, no, just keep investing up 101 00:07:07,605 --> 00:07:09,404 Suze: to the point of the match, and that's it. Not 102 00:07:09,404 --> 00:07:14,285 Suze: a penny more because it's still free money. So here's 103 00:07:14,285 --> 00:07:17,795 Suze: what I first want to teach you in the Suze school. 104 00:07:18,709 --> 00:07:21,980 Suze: And I haven't taught this in a long time only 105 00:07:21,980 --> 00:07:26,649 Suze: because I thought for sure everybody would know about it 106 00:07:27,059 --> 00:07:31,739 Suze: and that people really wouldn't put people in loaded mutual 107 00:07:31,739 --> 00:07:36,579 Suze: funds anymore. They just don't make sense. So first of all, 108 00:07:36,980 --> 00:07:42,130 Suze: remember the 5.75% load that his husband had to pay. 109 00:07:42,839 --> 00:07:44,500 Suze: Imagine now, write this down. 110 00:07:45,040 --> 00:07:49,170 Suze: That you invested $10,000. That's all. 111 00:07:49,880 --> 00:07:55,790 Suze: And there was a 5.75% load which goes to who 112 00:07:56,089 --> 00:07:59,290 Suze: the broker who sold you the funds. 113 00:08:00,160 --> 00:08:05,640 Suze: Now what does that broker, financial person, the adviser have 114 00:08:05,640 --> 00:08:11,000 Suze: to do with the performance of that fund? Absolutely nothing. 115 00:08:11,079 --> 00:08:14,040 Suze: It's like, for instance, you go and you buy a 116 00:08:14,040 --> 00:08:18,799 Suze: car and a person selling you that car makes a 117 00:08:18,799 --> 00:08:22,640 Suze: commission for doing so. Now the question becomes, what does 118 00:08:22,640 --> 00:08:26,470 Suze: that person have to do with the performance of that car. 119 00:08:26,950 --> 00:08:31,100 Suze: And the answer to that question is absolutely nothing. They're 120 00:08:31,100 --> 00:08:35,608 Suze: just selling it to you. Same thing with a financial adviser. 121 00:08:36,219 --> 00:08:39,799 Suze: If you buy a loaded fund, now number one, how 122 00:08:39,799 --> 00:08:43,059 Suze: do you know if it's loaded? It has the letter 123 00:08:43,059 --> 00:08:47,900 Suze: A or B on the back of their name. So 124 00:08:47,900 --> 00:08:52,780 Suze: in this case, the American 2060 Target Date Eetirement fund 125 00:08:52,780 --> 00:08:55,579 Suze: Class A means that up front 126 00:08:56,200 --> 00:09:03,718 Suze: they immediately take out 5.75% to pay the financial salesperson 127 00:09:03,719 --> 00:09:07,200 Suze: that sold you this fund. All right, now what does 128 00:09:07,200 --> 00:09:09,949 Suze: that mean to you? Let's go back to where I started. 129 00:09:10,359 --> 00:09:14,440 Suze: Let's just say you put in $10,000 in one lump 130 00:09:14,440 --> 00:09:15,679 Suze: sum in this fund. 131 00:09:17,059 --> 00:09:22,510 Suze: The 5.75% of the amount that you put in comes 132 00:09:22,510 --> 00:09:29,359 Suze: to $575. All right, so let's just say on Monday 133 00:09:29,849 --> 00:09:32,289 Suze: you decide you want to buy that fund. 134 00:09:33,250 --> 00:09:37,130 Suze: You buy that fund and OK, everything's all right, but 135 00:09:37,130 --> 00:09:40,000 Suze: the next day you've heard this podcast and you go, 136 00:09:40,169 --> 00:09:43,809 Suze: I want to sell that fund, and if that fund 137 00:09:43,809 --> 00:09:48,449 Suze: has not moved one penny, it's exactly the same price 138 00:09:48,450 --> 00:09:51,650 Suze: as it was the day before, you would get back 139 00:09:51,650 --> 00:10:00,210 Suze: only $9,425. Why? Because $575 went like I said, to 140 00:10:00,210 --> 00:10:02,210 Suze: pay the financial advisor. 141 00:10:02,989 --> 00:10:06,530 Suze: You have to think about this. This fund has to 142 00:10:06,530 --> 00:10:12,579 Suze: go up at least five and three quarters percent just for you to break even. 143 00:10:13,010 --> 00:10:19,450 Suze: So you are already down five and three quarters percent on your money the 144 00:10:19,450 --> 00:10:24,539 Suze: second that you buy this particular fund that has this load. 145 00:10:25,619 --> 00:10:28,909 Suze: If you simply bought a fund known as a no 146 00:10:28,909 --> 00:10:29,750 Suze: load fund. 147 00:10:30,750 --> 00:10:33,429 Suze: Doesn't charge you to buy it. Doesn't charge you to 148 00:10:33,429 --> 00:10:33,909 Suze: sell it. 149 00:10:34,690 --> 00:10:38,409 Suze: If you bought it for $10,000 and you decided that 150 00:10:38,409 --> 00:10:40,250 Suze: you wanted to sell it the next day and it 151 00:10:40,250 --> 00:10:46,030 Suze: didn't change in price, you would get all $10,000 back. 152 00:10:46,330 --> 00:10:51,409 Suze: There's also something known as another type of loaded mutual 153 00:10:51,409 --> 00:10:57,289 Suze: fund called B shares, and B shares simply are they 154 00:10:57,289 --> 00:10:59,809 Suze: sell it to you under the pretense that there isn't 155 00:10:59,809 --> 00:11:02,169 Suze: a load, but there is. 156 00:11:02,700 --> 00:11:05,780 Suze: It's probably five and three quarters percent as well. 157 00:11:06,729 --> 00:11:09,570 Suze: Not only is there a load. 158 00:11:10,440 --> 00:11:14,469 Suze: But there's also something called a 12B1 fee. 159 00:11:15,539 --> 00:11:19,239 Suze: And it's actually more expensive in the long run than 160 00:11:19,239 --> 00:11:23,969 Suze: a share funds, so you have to know how these 161 00:11:23,969 --> 00:11:29,329 Suze: things work. Personally, I would never, ever, ever buy a 162 00:11:29,330 --> 00:11:34,098 Suze: B share fund. So if some financial advisor says, Hey, 163 00:11:34,609 --> 00:11:37,840 Suze: I have this mutual fund, it's not gonna cost you anything, 164 00:11:38,090 --> 00:11:39,929 Suze: and they give you the name and it has the 165 00:11:39,929 --> 00:11:42,650 Suze: letter B at the end of it, just get out 166 00:11:42,650 --> 00:11:43,090 Suze: of there. 167 00:11:43,890 --> 00:11:46,299 Suze: Don't do it. Don't do it. Don't do it. 168 00:11:48,020 --> 00:11:51,919 Suze: Now, that was one problem with what Dr. E is 169 00:11:51,919 --> 00:11:56,169 Suze: talking about here was the load. So lesson one, do 170 00:11:56,169 --> 00:12:00,400 Suze: not buy a loaded mutual fund. If you're going to 171 00:12:00,400 --> 00:12:05,400 Suze: buy a mutual fund, simply buy a no load fund 172 00:12:05,400 --> 00:12:09,270 Suze: where there's no fee to buy or a fee to sell. However, 173 00:12:09,359 --> 00:12:12,030 Suze: I just want to put in a caveat here. 174 00:12:12,869 --> 00:12:15,780 Suze: You can buy a mutual fund or you can buy 175 00:12:15,780 --> 00:12:20,260 Suze: an exchange traded fund. I personally, as you know, if 176 00:12:20,260 --> 00:12:25,539 Suze: you've been listening, like exchange traded funds far better than 177 00:12:25,539 --> 00:12:30,580 Suze: mutual funds. And why is that? Cause mutual funds can 178 00:12:30,580 --> 00:12:34,020 Suze: only be bought or sold at the end of the 179 00:12:34,020 --> 00:12:35,419 Suze: business day. 180 00:12:36,020 --> 00:12:40,569 Suze: An exchange traded fund which is identical in its holdings 181 00:12:40,570 --> 00:12:44,450 Suze: to a mutual fund can be sold any time while 182 00:12:44,450 --> 00:12:48,609 Suze: the market is open. So I just want you to 183 00:12:48,609 --> 00:12:53,858 Suze: know that, however, in 401ks in retirement accounts, chances are 184 00:12:53,859 --> 00:12:57,010 Suze: you're only offered mutual funds. 185 00:12:58,099 --> 00:12:59,880 Suze: The expense ratio. 186 00:13:00,700 --> 00:13:08,939 Suze: In this particular fund, the expense ratio is 0.73%. Now 187 00:13:08,940 --> 00:13:11,739 Suze: that doesn't seem like a whole lot of money, but 188 00:13:11,739 --> 00:13:15,140 Suze: I'm going to show you in a second how much 189 00:13:15,140 --> 00:13:21,450 Suze: it really is. Now, why is there an expense ratio? 190 00:13:21,659 --> 00:13:27,070 Suze: An expense ratio simply pays the expenses, so to speak, 191 00:13:27,419 --> 00:13:30,260 Suze: of that fund to keep it running. 192 00:13:30,979 --> 00:13:35,780 Suze: Because all funds and ETFs, by the way, have what's 193 00:13:35,780 --> 00:13:39,049 Suze: known as a portfolio manager. 194 00:13:40,270 --> 00:13:43,130 Suze: And that is like let's go back to the car 195 00:13:43,130 --> 00:13:46,468 Suze: example for a second. That is like the mechanic that 196 00:13:46,469 --> 00:13:50,979 Suze: fixes your car that keeps it running smoothly and of 197 00:13:50,979 --> 00:13:55,010 Suze: course you have to pay him or her, right? That 198 00:13:55,010 --> 00:13:59,569 Suze: is what the expense ratio is in a mutual fund 199 00:13:59,570 --> 00:14:05,299 Suze: or an ETF. The manager who's managing that fund gets 200 00:14:05,299 --> 00:14:07,330 Suze: paid to do so. 201 00:14:07,940 --> 00:14:13,478 Suze: In this particular fund, like I said, it's 0.73%. Now 202 00:14:13,479 --> 00:14:16,479 Suze: just put a pin in all of that for a second. 203 00:14:17,489 --> 00:14:21,729 Suze: Over all the years that I've been doing this, I've 204 00:14:21,729 --> 00:14:27,369 Suze: said to you, I don't like target date retirement funds. 205 00:14:28,000 --> 00:14:30,390 Suze: And a lot of you go, Why is that, Suze? 206 00:14:30,429 --> 00:14:33,669 Suze: It's so easy. I deposit my money and I never 207 00:14:33,669 --> 00:14:37,739 Suze: have to think about it again. Bingo, Do not be 208 00:14:37,739 --> 00:14:41,719 Suze: a lazy investor. Do not just say, Oh, this'll be easy, 209 00:14:41,869 --> 00:14:44,330 Suze: and I'm through with it. You have worked hard for 210 00:14:44,330 --> 00:14:47,260 Suze: your money. You have to make sure that your money 211 00:14:47,260 --> 00:14:50,109 Suze: works hard for you, and just putting it in a 212 00:14:50,109 --> 00:14:55,580 Suze: target date retirement account in most cases make no sense. Why? 213 00:14:56,380 --> 00:15:01,659 Suze: You don't invest according to age, everybody. You invest according 214 00:15:01,659 --> 00:15:04,580 Suze: to what's happening in the economy. 215 00:15:05,580 --> 00:15:08,049 Suze: So do you want all your money in the stock 216 00:15:08,049 --> 00:15:10,900 Suze: market if the economy is going down, down, down, everything's 217 00:15:10,900 --> 00:15:12,369 Suze: just going to whatever? 218 00:15:13,280 --> 00:15:17,239 Suze: No, not necessarily. Maybe you want more in bonds, especially 219 00:15:17,239 --> 00:15:19,679 Suze: if you know that interest rates are high and they're 220 00:15:19,679 --> 00:15:23,400 Suze: going to come down. There's times for bonds. There's times 221 00:15:23,400 --> 00:15:27,960 Suze: for equity. There's times for everything, but that's dictated by 222 00:15:27,960 --> 00:15:32,320 Suze: what's happening in the economy. And just because you're older, 223 00:15:32,760 --> 00:15:37,640 Suze: depending on your own financial circumstances, doesn't mean that therefore 224 00:15:37,640 --> 00:15:41,359 Suze: all the money in your retirement account should be in bonds. 225 00:15:42,340 --> 00:15:46,349 Suze: And that's possibly what would happen to you if you 226 00:15:46,349 --> 00:15:51,669 Suze: put the money in a target date retirement account, because 227 00:15:51,669 --> 00:15:55,200 Suze: as you get older to that date. 228 00:15:55,969 --> 00:15:59,419 Suze: They take you out of the stock market and put 229 00:15:59,419 --> 00:16:04,049 Suze: you more and more and more into bonds. 230 00:16:04,750 --> 00:16:07,400 Suze: And do you really need to be in bonds? 231 00:16:08,250 --> 00:16:11,710 Suze: Or do you need to be in stocks? Does it matter? 232 00:16:11,960 --> 00:16:17,080 Suze: And it does, but it depends on your individual circumstances. 233 00:16:17,119 --> 00:16:24,000 Suze: Doctor E's husband is probably only 30 years old because 234 00:16:24,000 --> 00:16:29,229 Suze: he happened to choose an American 2060 Target Date Fund, 235 00:16:29,919 --> 00:16:34,109 Suze: which is what his projected retirement date is in his head, 236 00:16:34,280 --> 00:16:36,309 Suze: which is 35 years from now. 237 00:16:36,750 --> 00:16:41,729 Suze: So he's probably about 30 years of age, so that 238 00:16:41,729 --> 00:16:46,849 Suze: means we have 35 years that this money may be 239 00:16:46,849 --> 00:16:51,159 Suze: in this fund. Let's just first look at and going 240 00:16:51,159 --> 00:16:55,169 Suze: back five years, that's all, just five years. 241 00:16:56,109 --> 00:17:01,700 Suze: What was the average annual rate of return for the AANTX, 242 00:17:01,710 --> 00:17:05,949 Suze: the target date fund, versus the Vanguard Total Stock market 243 00:17:05,949 --> 00:17:10,339 Suze: index fund. This is just going back five years, OK? 244 00:17:11,729 --> 00:17:16,989 Suze: The American fund that you're paying that 0.73% expense ratio 245 00:17:16,989 --> 00:17:23,629 Suze: for and the load averaged about 10.5 to 11%. 246 00:17:24,930 --> 00:17:29,069 Suze: The Vanguard Total Stock Market index fund, on the other hand, 247 00:17:29,400 --> 00:17:37,199 Suze: averaged over the last five years 15%. Now again, I 248 00:17:37,199 --> 00:17:42,040 Suze: want you to think about that. So that would have 249 00:17:42,040 --> 00:17:47,520 Suze: been quite a bit of money difference. Now let's compare 250 00:17:47,520 --> 00:17:51,198 Suze: apples to apples, all right? Let's just assume you put 251 00:17:51,199 --> 00:17:52,880 Suze: in $100,000. 252 00:17:53,609 --> 00:17:56,229 Suze: That's all you never put in any more money, and 253 00:17:56,229 --> 00:18:02,829 Suze: you did it for 35 years, OK, so they both 254 00:18:02,829 --> 00:18:08,139 Suze: did the exact same gross return of 10%. Let's say 255 00:18:08,430 --> 00:18:09,660 Suze: that is true. 256 00:18:10,430 --> 00:18:15,859 Suze: Do you know over 35 years that the Vanguard Total 257 00:18:15,859 --> 00:18:22,689 Suze: Stock Market Index Fund with an expense ratio of 0.04%, 258 00:18:22,780 --> 00:18:31,060 Suze: you would have $2,775,000. Not bad. 259 00:18:31,800 --> 00:18:34,109 Suze: That's what your 100,000 would have grown to. 260 00:18:34,829 --> 00:18:38,938 Suze: But the American Fund at the expense ratio, remember, the 261 00:18:38,939 --> 00:18:40,750 Suze: return of 10% is identical. 262 00:18:41,770 --> 00:18:47,819 Suze: The American Fund, because of the expense ratio of 0.73%, 263 00:18:48,109 --> 00:18:58,109 Suze: you would have only $2,226,000. That is approximately a five 264 00:18:58,109 --> 00:19:04,389 Suze: to $600,000 difference simply because of why not the performance 265 00:19:04,390 --> 00:19:08,060 Suze: of the fund but the expense ratio. 266 00:19:08,489 --> 00:19:13,050 Suze: So don't go telling me that a little expense ratio 267 00:19:13,050 --> 00:19:23,260 Suze: difference in this case 0.04% versus 0.73% doesn't make a difference. 268 00:19:23,510 --> 00:19:27,069 Suze: It matters big time and just so you know. 269 00:19:27,989 --> 00:19:32,790 Suze: As time goes on, obviously the American funds won't be 270 00:19:32,790 --> 00:19:37,468 Suze: returning probably as much as the Vanguard Total Stock Market 271 00:19:37,469 --> 00:19:41,750 Suze: Index Fund. But just let's assume over the next 35 272 00:19:41,750 --> 00:19:46,569 Suze: years they return the average of about 10 to 11% 273 00:19:46,569 --> 00:19:52,119 Suze: versus the 15 to 16%. Let's do one more example 274 00:19:52,119 --> 00:19:52,780 Suze: for you. 275 00:19:53,349 --> 00:20:01,139 Suze: Let's say you put in $100,000 and the Vanguard Total Stock Market Index Fund averaged 276 00:20:01,140 --> 00:20:07,708 Suze: about 15% for the next 35 years versus the American 277 00:20:07,709 --> 00:20:13,188 Suze: funds which averaged about 10% for the next 35 years. 278 00:20:13,670 --> 00:20:17,329 Suze: Do you know 35 years from now you would have 279 00:20:17,329 --> 00:20:32,530 Suze: approximately $13,300,000 in the Vanguard Total Stock Market Index Fund versus about $2,800,000 in the 280 00:20:32,530 --> 00:20:39,439 Suze: target date mutual fund. That's about an $11 million difference. 281 00:20:40,729 --> 00:20:43,319 Suze: Now I'm not saying that would actually happen. 282 00:20:44,189 --> 00:20:48,629 Suze: But it's possible because as you're getting older, that Target 283 00:20:48,630 --> 00:20:54,189 Suze: Date Fund is getting more and more conservative, so. 284 00:20:55,050 --> 00:20:59,719 Suze: Are you all understanding why I don't like Target Date 285 00:20:59,719 --> 00:21:01,290 Suze: Mutual Funds, number one? 286 00:21:02,030 --> 00:21:08,339 Suze: And why an expense ratio really really matters if you 287 00:21:08,339 --> 00:21:12,849 Suze: can put those two things together with every single investment 288 00:21:12,849 --> 00:21:17,719 Suze: you make that you ask the question before you buy something. Hey, 289 00:21:17,780 --> 00:21:20,260 Suze: is there a commission on this? Is there a load 290 00:21:20,260 --> 00:21:24,410 Suze: on this? Hey, what's the expense ratio? 291 00:21:25,290 --> 00:21:29,780 Suze: And just look at it and compare it to what 292 00:21:29,780 --> 00:21:34,280 Suze: the Vanguard Total Stock Market Index Fund has done over 293 00:21:34,280 --> 00:21:37,750 Suze: the past 5 years or so in comparison to what 294 00:21:37,750 --> 00:21:39,270 Suze: you're about to buy. 295 00:21:39,760 --> 00:21:44,030 Suze: I think the numbers will tell you what you should 296 00:21:44,219 --> 00:21:49,739 Suze: and should not be doing, and that is your Suze 297 00:21:49,739 --> 00:21:53,260 Suze: School for today. So there's only one thing that I 298 00:21:53,260 --> 00:21:55,489 Suze: want you to remember when it comes to your money, 299 00:21:55,699 --> 00:22:00,180 Suze: and it is this people first, then money, then things. 300 00:22:00,229 --> 00:22:05,410 Suze: Now you stay safe and secure. Bye bye now.