My kids absolutely LOVE bottled water. I remember that when bottled water first came into the public eye, my friends & I laughed and said that if we came up with catchy packaging, a cool name, and maybe even a slogan that sounds like we care about something, we could make millions of dollars selling regular tap water to people who are far too easily separated from their hard earned dollars. Little did we know that we underestimated how much money we could make big time!!!! It’s not MILLIONS, it’s BILLIONS…per month!!!
This article talks about the various “types” of bottled water. What’s the difference between artesian, distilled, mineral, PWS, purified and spring water? Yeah, I had no idea either… but, distilled, PWS and purified may have all originated at your kitchen sink. Yep, tap water! My college buddies and I were on to something. We just didn’t realize it at the time. Check out this article and see what it is that you, your kids, your friends and your coworkers are REALLY drinking. (Just don’t tell them what it is or you could be viewed as a no-fun know-it-all…)
Once you know what you’re actually drinking, you may rethink what you drink. Hey, that’s going to be my new bottled water company’s slogan. “Rethink your drink!” I like it…
Your water isn’t the only thing that may need rethinking. Do you really know what you own when it comes to your investments and how much they cost? I’ve seen several people lately who have multiple accounts at multiple financial institutions and they are trying to view all of their accounts as one total portfolio and don’t really have a good handle on what they own. They are all working with a financial advisor (different advisors for each person) and wanted to understand what funds they own. Their advisor explained what they bought back when they bought it, but time has faded their understanding.
When we looked at their accounts, I noticed something. Each person owned about 10-15 mutual funds spread across all accounts. That’s good, right? It’s diversification. Well…maybe!
Here’s why I say it’s a maybe and not a yes. With the free version of Morningstar, or Yahoo Finance or Google Finance, it’s possible to enter a portfolio into these applications and see your multiple account portfolio as one. It’s a pretty cool thing to do if you have multiple accounts. Once you do that, it can get interesting. Your financial advisor can run something called an “overlap report” to show you how much of the same stocks you own in each of your funds. When we compared what stocks each person owned in their multiple accounts vs. a simple S&P 500 Index fund, the results were surprising…
By owning a lot of different funds, each person I talked to had created an account that looked very similar to the S&P 500 index fund. You can buy an index fund and pay a very small (under ¼% usually) annual fee. Or, you can do it the expensive way! That’s what these people did. They were paying an upfront commission of ~5% (or an annual fee of ~1%), plus fees for actively managed mutual funds that were ~1.25% annually. And what did they get for that fee? Tap water! They were paying an extra 1-2% each year to have active managers replicate a low cost index fund. They are doing some rethinking now! Rather than owning a de facto index fund, they can own actual index funds, add in international and bond funds for real diversification, and have a better balanced portfolio at a fraction of the cost.
Whether it’s your portfolio or your water, know what you’re buying! It can save you money over the long haul!