$Berkshire Hathaway B(BRK.B.US)"Compared to the volatility of the stock market, annual trading commissions and management costs of 2%~3% may appear insignificant. For investors who can achieve annual returns of 20%~30%, these fees only account for a small portion. However, these costs significantly harm long-term wealth accumulation. If a $1,000 investment grows at an annual compound rate of 11% (the nominal return of stocks post-World War II), it would grow to $23,000 in 30 years. A 1% annual fee would reduce the accumulated wealth by nearly 3%. If the annual fee is 3%, the $1,000 investment would only grow to $10,000, less than half of the original accumulated wealth. For a 25-year-old investor, every 1% increase in annual trading costs would force them to delay retirement by two years."

Excerpt from

The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New (5th Edition) (Hua Zhang Classics · Financial Investment)

by Jeremy J. Siegel

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