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Keep costs low from "summary" of The Little Book of Common Sense Investing by John C. Bogle
Keeping costs low is a fundamental principle of successful investing. The key is to minimize the expenses you pay to own an investment. In the world of investing, costs matter - a lot. They may seem small individually, but when compounded over time, they can have a significant impact on your returns. The more you pay in fees and expenses, the less you keep in your own pocket. The idea is to focus on the long-term, and the best way to do that is to keep costs low. When you invest in low-cost index funds, you are essentially buying a diversified portfolio of stocks at a low cost. This approach allows you to capture the returns of the overall market without the high fees charged by actively managed funds. By keeping costs low, you can increase your chances of outperforming the majority of investors in the long run. High costs can erode your returns over time, so it's important to be mindful of the fees you are paying. One way to keep costs low is to invest in passively managed index funds, which have lower expenses compared to actively managed funds. Another way is to avoid unnecessary trading, which can incur additional costs such as commissions and taxes. In the end, the goal is to maximize your returns by minimizing your costs. By keeping costs low, you ensure that more of your money stays invested and continues to grow over time. It's a simple yet powerful concept that can make a big difference in your investment success. So, remember to keep costs low and watch your returns grow.
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