quarta-feira, 22 de junho de 2016

OFE - No, the fees were not crazy high


Fees for OFE were 7% one time, initial fee + 0,045% every year.

Time to retirement is 40 years initially, going down to zero, so it averages 20 years for any given amount of money invested.

USA 401k retirement fees according to the "401k Averages Book" are small initially, but then every year you pay between 0,3% and 1,8%. The OFE fee is roughtly equivalent to a every year 0,5% fee over 20 years.

Value in 20 years = After Fee*((1+5% per year return - Yearly Fee)^Years)


Initial Initial Fee After Fee Yearly Fee Value in 20 years, at 5% per year Amount of fees
OFE 10000 700 9300 0,045% 24465 784
0,5% Fee 10000 0 10000 0,5% 24117 1049
Min 401k 10000 0 10000 0,3% 25057 617
Max 401k 10000 0 10000 1,8% 18775 4287

The actual OFE results should be a little worse than this table since you can imagine you will earn more in your second half of your live than in your first one, but I don't think it would be such a dramatic difference.

One time fees can be converted into repetitive fees.


sexta-feira, 17 de junho de 2016

War in Ukraine and Armenia - status update

I thought that the conflict was fully frozen, since in the last 12 months there were no changes in the areas controlled by the warring parties.

Compare the map today:

https://upload.wikimedia.org/wikipedia/commons/9/91/Map_of_the_war_in_Donbass.svg

With the map from 6 months ago:


https://upload.wikimedia.org/wikipedia/commons/archive/9/91/20160524163130%21Map_of_the_war_in_Donbass.svg

I concluded that it would be irrational to keep firing without changes in controlled area. But it looks like that both sides are simply happy to fire at each other continuously from a distance, including with weapons with very low precision such as mortars.

There are detailed OSCE monitoring group daily reports if anyone is interrested:

http://www.osce.org/ukraine-smm/246986
Conflict Deaths have fallen sharply from 2015, but at an estimated 273 for 2016 so far I personally think it is still a lot.
https://en.wikipedia.org/wiki/List_of_ongoing_armed_conflicts#1.2C000.E2.80.939.2C999_deaths_in_current_or_past_year

Also worrying when it comes to armed conflicts in Europe is the azeri-armenian conflict:

https://en.wikipedia.org/wiki/2016_Armenian%E2%80%93Azerbaijani_clashes

Azerbaijan attacked Armenia recently, and conquered 1 small village, and mostly likely they will do it again. Their army is stronger due to the oil money, they have high-tech suicide drones from Israel and staged ISIS-like decapitations of captured armenians.

Praying for peace in Ukraine & Armenia.