401(k)'s not making nearly as much

The more I read about investing, the more it becomes clear to me that it is way over-rated. Those ten percent return rates people talk about are unreasonable expectations. All the investment propaganda loves to show you what amazing rates of return you can get. What they neglect to mention is that the rates they tell you are before including taxes, inflation, and fees. So what starts as a ten percent rate of return on a mutual fund becomes 7% after inflation. Then it becomes 6% after typical fees. Then it becomes something like 4 or 5% after taxes.

A forbes article this week does a good job talking about the fees issue. This is the only one that an investor has real control over. I have therefore keep a majority of my 401(k) money in two index funds, and a low fee vanguard bond fund. I wish I had some low fee international stock options. It bugs me that I do not have more money spread around the world.