Ep 60: Why The Cheapest Investment Option May Not Be The Best

Retire Smarter with Kevin Kroskey, CFP® & Tyler Emrick, CFA® CFP® · Nov 5, 2020 · 35m

The purchase price of your car is one factor to consider. But the Total Cost of Ownership -- adding in costs for insurance, fuel, maintenance and repairs, as well as the residual value upon sale -- is a better way to evaluate financial aspects of a car purchase. In doing so, the cheapest vehicle is often more expensive than initially perceived.

Same too goes for selecting investments. Many solely use the expense ratio to determine what fund to buy. But while the expense ratio is important and easily observable, it does not tell the whole story. In fact, it may tell only a small part.

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