What does a 1% advisor fee over time do to your portfolio?

Here's the math in case anyone is in a similar boat and why it can cost over a million dollars in the end:

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1/ Example: You have $0 in your account today & began investing $30K every year in a low-cost index fund with the long-term plan of not touching it for 30 years because you're a beast who values long-term results.

2/ Assuming a 10% average annual NON-inflation adjusted growth (What you'll see in your bank account, not necessarily what it's worth in today's dollars)

You will have $5.7 million in 30 years

3/ If you have a financial advisor who is shaving off 1% of your earning every year, by the end of 30 years, you're looking at $4.6 million.

That is assuming your advisor at least matched the market over 3 decades! That is something that has never been done by an active fund

4/ By the end of the year, only 85% of active fund managers will beat the market. After 5 years, the number of fund managers who beat the market are in the low single digits. After 10 years, that number is 0%. https://www.cnbc.com/2018/02/16/warren-buffett-won-2-point-2-million-on-a-bet-and-gave-it-to-girls-inc.html

5/ Let's get back to talk about our $5.7 million that is now worth $4.6 million.

This doesn't even include the higher expense ratios of the active funds that are usually in these portfolios. Let's say it's an additional ER of 0.5% across holdings.

6/ Now you're looking at $1,500,000 less in 30 years.

If you're looking to learn more about index investing. @JLCollinsNH book is the way to go. It literally changed my entire family's life.

Aff link: https://amzn.to/3r9xPiY