Jack Bogle: When our financial system—essentially our money managers, marketers of investment products and stockbrokers—put up zero percent of the capital and assume zero percent of the risk yet receive fully 80 percent of the return, something has gone terribly wrong in our financial system. As I note in the book, “the shift in our system from owners’ capitalism to managers’ capitalism has been devastating to investors.” The principles of sensible savings and investing are time-tested, perhaps even eternal.
Blake Ross: Wealthfront loves to paint itself as the anti-Wall Street, but it exploits the same achilles heel as its Manhattan cousins: Many people don’t have an intuitive grasp of the magic of compound interest, and so they certainly haven’t internalized the tyranny of compound fees. Then let us be clear: A 30-year old who invests $100,000 in his retirement with Wealthfront “for less than a night at the movies” will likely pay the company over $100,000 in fees by his 75th birthday.
Adam Nash: Unlike the many banks and brokerage firms that came before us, Wealthfront refuses to build our business by preying on clients with small accounts. It is why Wealthfront is completely free for investors with less than $10,000 invested and only a 0.25% advisory fee thereafter.
I never quite understood until recently whether Roth or non-Roth was better for me. This made it a lot clearer.