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It’s been years since I got to participate in a 401(k) retirement plan. Last time was when I worked at Expedia. I put the amount in that would maximize the employer contribution and didn’t pay much more attention.
The first thing I looked at this time was which investment options were index funds. There’s one index fund option for large-cap funds and one for small-cap funds. Out of 24 options, only two are index funds. That’s deplorable. To illustrate why, I dug around to find the expense ratios for the fund options. It wasn’t as easy to find as I would like, but when I did Fidelity showed it quite nicely.
| Name |
Category |
Gross Expense Ratio |
Shareholder Fees |
| COMPANY STOCK |
Company Stock |
– |
Commission on stock trades: $0.029 per share |
| MAINSTAY LGCP GR R1 (MLRRX) |
Large Cap |
0.87% |
No additional fees apply. |
| MFS VALUE R4 (MEIJX) |
Large Cap |
0.68% |
No additional fees apply. |
| SPTN 500 INDEX INST (FXSIX) |
Large Cap |
0.05% |
No additional fees apply. |
| ARTISAN MID CAP INST (APHMX) |
Mid-Cap |
1.03% |
No additional fees apply. |
| ARTISAN SM CAP VALUE (ARTVX) |
Small Cap |
1.24% |
No additional fees apply. |
| VANG SM GR IDX INST (VSGIX) |
Small Cap |
0.08% |
No additional fees apply. |
| FID DIVERSIFD INTL K (FDIKX) |
International |
0.81% |
Short term trading fees of 1% for shares held less than 30 days. |
| DODGE & COX BALANCED (DODBX) |
Blended Fund |
0.53% |
No additional fees apply. |
| FID FREEDOM K 2005 (FFKVX) |
Blended Fund |
0.50% |
No additional fees apply. |
| FID FREEDOM K 2010 (FFKCX) |
Blended Fund |
0.54% |
No additional fees apply. |
| FID FREEDOM K 2015 (FKVFX) |
Blended Fund |
0.57% |
No additional fees apply. |
| FID FREEDOM K 2020 (FFKDX) |
Blended Fund |
0.59% |
No additional fees apply. |
| FID FREEDOM K 2025 (FKTWX) |
Blended Fund |
0.62% |
No additional fees apply. |
| FID FREEDOM K 2030 (FFKEX) |
Blended Fund |
0.67% |
No additional fees apply. |
| FID FREEDOM K 2035 (FKTHX) |
Blended Fund |
0.68% |
No additional fees apply. |
| FID FREEDOM K 2040 (FFKFX) |
Blended Fund |
0.68% |
No additional fees apply. |
| FID FREEDOM K 2045 (FFKGX) |
Blended Fund |
0.69% |
No additional fees apply. |
| FID FREEDOM K 2050 (FFKHX) |
Blended Fund |
0.69% |
No additional fees apply. |
| FID FREEDOM K 2055 (FDENX) |
Blended Fund |
0.69% |
No additional fees apply. |
| FID FREEDOM K INCOME (FFKAX) |
Blended Fund |
0.45% |
No additional fees apply. |
| MIP II CL 1 |
Bond Investments |
0.56% |
No additional fees apply. |
| PIM TOTAL RT INST (PTTRX) |
Bond Investments |
0.46% |
No additional fees apply. |
I’ve highlighted the index fund for large-cap and the option with the next lowest expense ratio, and the same for the small-cap index fund. Those percentages indicate the amount the fund managers skim off the top every year. As a retirement saver, you never even see it because they don’t list this percentage in how much you make. They could do this (examples use a 1% expense ratio for arithmetic convenience):
| Investment | | $10,000 |
| Increase | | $500 |
| Fee | | -$105 |
| Total | | $10,395 |
Instead, they do this:
| Investment | | $10,000 |
| Increase | | $395 |
| Total | | $10,395 |
Notice in my example, the fee is a percentage of the total, not of the increase. An average fund manager might make the investor $500. An extraordinary fund manager might make $700. The average fund manager charges $105. The extra-ordinary one charges $107. Now, you might think you are getting a steal of $200 for only $2 more, but the real travesty is that the average manager gets $100 for very little work. To see that, look at an index fund.
The small-cap index fund I highlighted uses CRSP US Small Cap Growth Index to benchmark. Compared against their own benchmark, they lose over the last three months but just barely: return of 1.58% vs. the benchmark return of 1.6%. They compare very closely because all an index fund does is buy exactly what’s in the index.
For comparison, the actively managed fund uses Russell 2000 Value as it’s benchmark index. Compared against that, the managers lost 0.28% vs. the index’s gain of 1.78%. These managers are trying to beat the index by picking better investments than the index, charging for their “expertise”, and losing.
Now, that’s a short period of time and perhaps at other times the actively managed fund does better. But over time, index funds have better returns than actively managed funds. There are exceptions, but those options aren’t pertinent to the broad market investments that are available in a 401(k).
So basically, those investment options I have? I’m giving away $60 (for the large cap fund) to $115 (on the small cap fund) every year for nothing (on a baseline portfolio of $10,000). If I’m saving money every year for retirement, that amount grows every year, and cuts into the compounded interest every year.
All of this stuff is pretty well written about all over, but regular people don’t pay attention for a variety of reasons. I’m not naming my employer here, but they really should be doing better by their employees. Originally published at King Rat. You can comment here or there. Tags: investing, life
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A gave myself a couple of tasks to accomplish yesterday before the second session of my genealogy class. The first was to pick up the class packet from the copy center. The second was to pick up a Husky Card for access to the U.W. libraries. Both went swimmingly, so I got to my class early, hung out and read the text book.
The class was taught by James Rigali today. He’s the instructor for the history portions of the class. Topic was Organizing Historical Research Projects. After an overly long and fairly unimportant discussion of what is history? he delved into a basic method he wanted us to follow:
- Pick a subject. At this point, I’m thinking of doing my project on either or both of my third great grandparents, Patrick Parker and Mary Murphy. (I’ve written about them on the blog before.)
- Create an annotated chronology
- Develop research questions, both historical and genealogical
- Develop a bibliography. His overview included the following types of sources:
- General books, including textbooks.
- Scholarly articles (JSTOR)
- Encyclopedias (he didn’t cover this one too much)
- Historical books and magazines published at the time
- Local histories
- Historical maps
- Historical photographs.
- Newspapers of the time
- History web sites
-
 - Sample Research Journal
Keep a research journal. He didn’t really cover what to record on this, other than keeping what he called a two-sided journal . In other words, record what you are searching and reading on one side, and notes and thoughts on the other. He didn’t really seem like he’s embraced computer technology like I do.
Originally published at King Rat. You can comment here or there. Tags: life, school
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Fantasy author Jim C. Hines did a thing a while ago where he tried to duplicate the contorted poses of female characters on various book covers. It was a hit. People offered money if he’d do it again. Now he’s doing it for charity, the Aicardi Syndrome Foundation specifically. Donate money and as overall donation levels are reached, he picks a a donor at random and attempts to duplicate the cover of the donor’s choice. So far, over $4,500 has been donated to help people suffering from a pretty shitty illness.
I kicked in $100. And my choice was selected. I asked for the cover of Jeaniene Frost’s At Grave’s End. This is the pose:
I attempted this pose before submitting it, to see if it was indeed possible. It is, but it isn’t easy. It’s also useless as hell. When done like the cover, I was unable to move quickly at all. There’s no balance, and my center of gravity is not over my legs. I just couldn’t spring up to take on bad guys from that position. I suspect the look they were attempting was hot and fancy babe ready to spring into action to kill you but decided to sexy it up well past realistic. As cover artistry does. And it’s just not that hot in my view.
Jim Hines posted the first two poses this morning, including A Groin Cramping Pose :
For the record, the hottest cover pose for me is this:
It’s objectifying as hell (legs and butt only please), but the pose is doable. Anyone wanna guess why I like it? Stompy fucking boots for the win. crossposted from King Rat. Tags: life
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Now that I have unused capacity for stress in my life, I’m finally moving forward on remodeling my apartment. The big thing is to rip out the kitchen and put in an entirely new one. I’ve long griped about the limited cupboard and counter space in the kitchen. So that will be no more. In the mock-ups below, the kitchen extends out into the area where my kitchen table currently sits.
 - Kitchen mock-up, view 1
 - Kitchen mock-up, view 2
Mock up #2 is of the other side, where my refrigerator and range are currently. Part of the wall there will be removed to let in more light, and there will be counter space to either side of the range.
I am also planning on replace all the carpeting with laminate flooring and getting the popcorn ceiling material remove. I get that styles change and all, but whoever invented popcorn ceiling material and all the people who installed it need to have their heads checked. The shit is ugly, and it can’t be cleaned. It’s not like I walk on the ceiling and track mud all over it, but in an old building like this, all it takes is one water leak and the popcorn material has a permanent mark.
I’m excited about this.
The downside is this is going to cost me a lot of money. I had budgeted a lot for it, but the first estimate I received is about $1,000 over my budget and it doesn’t include replacing any of my appliances or furniture or the cost of storing my stuff for a month. One of my tasks this week is to find another contractor to give me a second bid. Thing is, the first bidder has done a lot of work for my family and it was really good work. I’d like to use them if I can, but it means I will need to find some extra money. crossposted from King Rat. Tags: life, remodel
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Four years ago right about now mom died.
This year, I haven’t broken down at random times. So that’s a plus.
It doesn’t seem like that long though. I still remember the 48 hours leading up to her death very vividly.
But in other ways, it’s been forever. I finally got everything for her estate done, signed the final paperwork and sent it to the lawyer on Thursday. I hate to think how long this would have taken if the family had fought over anything. Being the executor has felt like it would go on forever. Now I wait for final notification and hope I didn’t screw anything up.
Tomorrow, I will drive to Lynden and leave flowers on her grave. I’d do it today, but I am leading a phone bank for Approve Referendum 74 tonight, and that is too important to skip. For the rest of the local family, I leave an evergreen branch on their graves around Christmas, to continue my grandfather’s tradition. However, mom’s buried too far away to do that if there’s snow. The flowers I leave aren’t elaborate. I’ll probably just buy a small marigold. Mom doesn’t care. She’s dead. This is for me to keep memories alive. crossposted from King Rat. Tags: life, mom
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