Luck, Stupidity, and Getting Ripped Off

In a previous post I recounted how luck and stupidity kickstarted my retirement savings journey, but I glossed over one important detail: the cost.

In the mid-eighties, high-fee front-loading was standard practice, and these products were typically sold by people whose entire compensation depended on shifting them. The pressure to sell was enormous, and the salespeople were good at their jobs.

My twenty-year-old self walked straight into one of them. He was slick, he was persuasive, and he played on the benefits to my future self while glossing over what any of it would actually cost me. I didn’t understand what I was signing, and I suspect he knew that. In any honest account, I was being taken advantage of.

And yet. I’m genuinely grateful.

The reason comes down to something simple: time in the market is the single biggest driver of long-term returns. Not timing. Not stock picks. Not discipline or vision or any of the things people write books about. Just duration.

Without that pushy salesman doing what pushy salesmen do, I almost certainly wouldn’t have started saving for retirement until my mid-thirties at the earliest. Maybe later. Whatever fees he extracted would pale against the compounding I would have forfeited.

By the time I was forty and actually started thinking seriously about retirement, the foundation was already there. Twenty years of compounding and dollar cost averaging had already done their work. I had a substantial portfolio and I hadn’t even been paying attention.

That’s when I started educating myself properly — understanding fees, reading about how investing actually works. Vanguard was transforming the industry at that point, dramatically cutting the cost of index investing, and I moved my portfolio across. The same money started working considerably harder.

So yes, I was ripped off. I was twenty years old, I didn’t read the small print, and a commission-hungry salesman walked away with more of my money than he deserved.

But he also started a clock that I wouldn’t have started myself. And in investing, the clock is almost everything.

I sometimes wonder how many twenty-year-olds, now fully protected from pushy salesmen, are also fully protected from the conversation that changes their life. The industry cleaned itself up, and rightly so. But nobody’s starting that clock anymore.