Robert A. Bonavito, CPA PC


6. Mutual Fund Expenses

Some of you think that when you invest in a mutual fund there are no cost. But as most of us realize there’s no such thing as a free lunch. I think we have to realize that it does take money to manage a mutual fund, so there needs to be some type of cost. Hidden cost of mutual funds can range from .3% to over 3%. As you can see this is a very large fluctuation, and this can have extreme effects on your earnings. I try to tell my clients to carefully analyze all expenses of mutual funds and try to get as close to or under .5%.

Posted June 24, 2017 by Robert A Bonavito in Educational Videos

The Power of a Roth IRA

What is the best way to accumulate wealth? I would say open a Roth IRA. The Roth IRA is a unique vehicle in that it lets you contribute with after-tax dollars into a Roth IRA and grow tax-free. At any point in time the principal amount can be taken out without tax consequences and once you reach retirement age you can take out as much as you want tax-free. In fact, if a 20-year-old put just $5,000 in a Roth IRA for 11 consecutive years and stopped, by the time they retire they would have well over $5 million; remember its tax free.  

Posted June 17, 2017 by Robert A Bonavito in Educational Videos

Return On Invested Capital

If someone was to ask me for one matrix that best describes how successful a company is, it would be Return On Invested Capital (ROIC). This ratio gives you a strong glimpse of how the business is operating in a competitive market. It simply gives you the return or as I like to say it’s price - cost /capital. Michael Porter, the Harvard business professor in his book competitive strategies list five forces that define an industry. They are, barriers to entry, substitution threat, buyer power, supplier power, and competition rivalry.  If you want to understand how well a company is doing in its industry simply take a look at its Return On Invested Capital and compare it to its competitors.

Posted June 10, 2017 by Robert A. Bonavito in Educational Videos