If you follow the link to the financial calculator mentioned in the article, it's pretty simple. http://www.math.com/students/calculators/source/compound.htm h

If you follow the link to the financial calculator mentioned in the article, it's pretty simple. http://www.math.com/students/calculators/source/compound.htm http://www.math.com/students/calculators/source/compound.htm For example, if you invest $100 for 50 years at 7%, at the end of the 50 years you have $3278.04. If you invest into a fund that nominally returns 7%, but charges a 2% fee, your net increase is 5%. If you invest $100 for 50 years at 7%, at the end of the 50 years you have $1211.93. 1211.94/3278.04 = 36.97% Not quite 1/3rd, but close enough for government work. So for the average person who blindly shotguns their 401K selections without considering expense ratios, there are many fund managers living in the Hamptons.