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Soft dollars, a form of legal kickback, is a sly way you can get ripped off by mutual fund managers. The best way to avoid these losses altogether is to restrict your purchases of mutual funds to your 401(k) and try to only buy indexed mutual funds such as the Vanguard 500 (VFINX). Article: Soft dollars, a form of legal kickback, is a sly way you can get ripped off by mutual fund managers. Full service brokers give these kickbacks to non-indexed mutual funds in the form of a “rebate” to purchase research, software, and even computer equipment. You pay for these soft dollars! In recent years, the SEC estimated that soft-dollar deals exceeded $1 billion. Typically, $1 accrues for every $1.60 of agency gross paid. Congress made these kickbacks legal in 1975 when it passed the “safe harbor” law. The legislation allows fund managers to pay more in get than is necessary, as long as the excess comes back in the form of services or research that benefits investors. The problem is that this has created an opaque system that can be abused. In 1998, the SEC found that some money mangers were using soft dollars to pay for salaries, office rent, and even vacations! Think close to this. You sweat every day at work to make a living. You buy a mutual fund to secure your retirement. Then the person who is supposedly protecting your retirement is sipping Margaritas in Cancun discussing with his or her buddies where to buy their next mansion with your retirement dollars! The second problem is that many funds are not taking sway of cost saving efficiencies in their operations just so that they can keep the soft-dollar spigot open. Think hereabouts this as well. If you had enough money to not have to work you would spend a considerable gob of time looking for safe places with a good return for your money. You would not waste money on things your family did not want and hence did not need. Why give your money then to a mutual fund managers who could care less if they waste some of your retirement dollars; its no skin off their back! The best way to not meddle with these losses all is to restrict your purchases of mutual funds to your 401(k) and try to only buy indexed mutual funds such as the Vanguard 500 (VFINX). Take Surveys & Process E-Mails Online! - Get Paid $25.00-75.00 Per Survey Completed! High Conversions! Low Refunds! Affiliates Earn 75% Commission! Data Entry Pro-Pays 75% New Site Design! - Old Payout was $22.60/Current Payout now $33.93 Per Sale! 2x less refunds. Affiliates Profit More than Ever Before! Try it & See. Article Index: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 |
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