My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Percentage-Based Fee Invisibility Model
People underestimate the long-term cost of percentage-based fees because they don't feel the pain of the payment, unlike lump-sum fees
Decision Rule
When evaluating financial services, convert percentage fees to dollar amounts over relevant time periods to make costs visible
How It Works
Percentage fees are automatically deducted from assets, creating psychological distance from the cost. Compound effect over decades makes the true cost exponentially higher.
Failure Modes
Ignoring compound effect of fees on final wealth
Not converting percentages to absolute dollars
Focusing on service benefits while ignoring cost structure
Comparing services based on percentage rates rather than total cost
Example Decision
“Goldman Sachs 1% fee seems reasonable until you realize it costs $100k annually on $10M portfolio, or $10M+ in lost compound growth over 30 years.”
Related Knowledge
Tax optimization provides more reliable alpha than investment selection
Focus optimization efforts on tax reduction rather than trying to beat market returns
Wealth Management A/B Test Framework
Split significant capital between professional wealth management and self-directed investing to empirically compare perf
Tax Alpha Over Investment Alpha Framework
Focus optimization efforts on tax reduction strategies rather than trying to beat market returns through security select
Build $30M+ tax-free retirement account through legal Roth IRA contribution loopholes
Accumulate $30M+ in tax-free Roth IRA by retirement age, paying zero taxes on withdrawals
Zero to something is always more life-changing
The psychological and practical impact of first wealth creation far exceeds subsequent wealth increases
Private banking and wealth management services destroy rather than create value for most high-net-wo
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