Quote:
Originally Posted by Perfectlap
^It's not just mutual fund managers, it's every kind of investment manager. I've seen studies that hedge funds (as a class) keep 98% of the profits they make with their investors money.
And that's because so few can beat the S&P over any significant period of time and simply shut down the fund. But they become fabulously wealthy collecting that cut of your initial investment win or lose. And private equity fund managers have the best deal of all: they get to keep that management fee even if they decide not to allocate a dime of your money towards any PE investment, getting rich for doing nothing! And if they lose any money they can simply walk away from any new debt they created (and used to pay themselves big salaries) thanks to the bankruptcy laws and the rule of OPP (other people's money).
To the OP, when people say "10K is not a lot of money" think abou this.
in 1965 $1,355 would be the equivalent of $10K today. Had you invested that $1,355 in the S&P, today you'd have ~$51K. Do you know how many seniors today can not write a check for $600? USA Today did a story on just that and the number is somewhere in the high 90% range (staggering numbers of seniors still living pay check to pay check after 65 -- I blame the costly pipe dream of home ownership).
Had you invested that $1,355 in Berkshire?
$14,000,000.
^ Timing is everything... but I'll settle for $51K if that's all I can get.
Rarely did a huge pile of money not start as a very very small one. If you wait until you have "a lot of money" to start investing in your future you're going to miss one boat after another. You'll never have good timing if you're on the sidelines.
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I agree with you on The home ownership pipedream. What made you to reach that conclusion? I'm just curious, because I kind of felt the same way. I'd like to hear more about it.
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