Ramit Sethi argues billionaires aren't financial geniuses, pointing out they overpay advisors with percentage-based fees, chase underperforming private equity deals, and ignore transaction costs on major purchases. He shows how ordinary investors can outperform them by using flat-fee advisors, calculating costs upfront, and holding assets long-term, like his 19-year-old car.
Just because this guy has billions of dollars, we should listen to his stupid right-wing opinions on politics. Shut the fuck up, rich guy. I don't like this idea that in American culture, rich people are glamorized and lauded as being so smart. You would think that rich people are financial geniuses, but often they are just good at making money. Managing it, they are not that good. For example, a lot of wealthy people pay an AUM fee to a financial advisor. This is something like 1% on their investments. They often will sign up for these shitty, larded-up private equity investments that are illiquid for a decade, and they don't even beat the S&P 500. Also, wealthy people, when they buy and sell cars, which can happen frequently, there are massive transaction costs. They don't even know them, nor do they really care. I think you can do better than this. You can actually beat the returns of lots of wealthy people by paying attention to how much your fees will cost you over time. For example, never pay a percentage of your portfolio to an advisor. If you decide to hire an advisor, pay a flat fee, an hourly rate, or a project basis if you need help. Run the numbers on buying and selling big-ticket items like cars and houses. A general guideline is that it's a better financial decision to buy quality and hold it for a long time. As an example, I drove the same car for 19 years.
