๐Ÿ”ด Index Funds VS Mutual Funds ๐Ÿ”ด

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Index funds VS mutual funds. Should you invest in index fund ETFs or mutual funds in the stock market? The biggest difference between the two funds is the fee they charge. Index fund ETFs charge very low fees, as low as 0.04% from Vanguard. Mutual funds charge anywhere from 0.50% to 2.00% a year. Over a life time of 60 years, these feels could add up to over 100 million dollars on investments of 1 million dollars. This is why you should always buy an index fund over a mutual fund offered by your bank. The banks don’t want you to know that most mutual funds can’t beat an index fund over a long period of time. 95% of mutual funds can’t beat the market. The banks want you to buy mutual funds because that’s how they make money. 1% to 2% of your money is a lot when considering the long term. That’s $10,000 to $20,000 on a million dollar investment, but a lot more if accounting for compounding. This is the most important lesson about investing if you’re a beginner in the stock market. Never buy a mutual fund, look into index funds like VOO for the Vanguard S&P 500.

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