Positive compound interest builds wealth. Negative compound interest shrinks wealth...

Compound interest rewards do it yourself portfolio managers. A $10,000 portfolio earning a compound annual return of 8% grows to $46,610 in 20 years. However, if you pay an advisor just 1% a year in fees, your $10,000 grows to only $38,697. You are ahead $28,697 and your advisor is ahead $7,913. How much are your advisor or mutual fund management fees? John Bogle says fund management fees are now in the 2 to 3% range.

The NASDAQ peaked in March of 2000 and fell at an annual rate of 44.4% to a post peak low in October 2002. If the compound annual growth rate averages 8% from that low, it will be 20 years before the NASDAQ makes new highs. How close is your portfolio to its highs?

The core concept of personal finance is that wealth is a function of how much you invest, how long you invest, and what rate of return you earn. How much money flows into investments has to do with your personal income statement. Income minus spending equals cash flow into investments. How long investments have to compound is a function of when you save and when you spend. The third component of building wealth is return on investment or compound interest rate. Compound interest is powerful. Negative compound interest is dangerous. Imagine having your life savings in NASDAQ from 2000 through 2002.

Do it yourself stock investors affect their stock portfolio return by managing their stock holdings. DIY Portfolio Management focuses on managing stock portfolios to beat market returns.

Millions of baby boomers will soon retire and be able to take direct control of their retirement nest egg. Prepared retirees increase their chances of a comfortable retirement lifestyle. If the 20% winner ratio of the business professors holds true, thousands of do it yourself retiree investors will beat the market. Who in your circle will be a winner? You or...?