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How is "Investment Expense" calculated?
Old 07-06-2018, 07:01 PM   #1
Confused about dryer sheets
Join Date: Jul 2018
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How is "Investment Expense" calculated?

Hi everyone,

First, I just discovered FIRECalc and the forum and really like the tool =)

My issue: I'm having trouble understanding how the "Investing Expense" column is calculated in the "single-year" spreadsheet when I check the box to "provide data and formulas in spreadsheet format." My understanding is that this represents, for example, the 0.18% investment fee I'd pay to Vanguard, and I assumed each entry in this column would be 0.18% x the amount in "Starting Portfolio." However, when I do the above multiplication, I always get a number that is close to, but not quite, the number in "Investment Expense."

I tried multiplying 0.18% by other columns that seemed similar to "Starting Portfolio" in magnitude, but still couldn't get the numbers to match.

I've attached my "single-year" spreadsheet and I'm hoping someone can tell me how "Investment Expense" is calculated. I added a column to the right (column V) with 0.18% x the amount in "Starting Portfolio," and highlighted it and the "Investment Expense" column to show what I mean when I say that they're close but not the same.

Thanks, any clarification is appreciated!


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Old 07-07-2018, 06:50 AM   #2
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Just a guess that it would be based on the beginning of year portfolio less the annual withdrawal since I suspect that FIRECalc assumes that withdrawals occur at the beginning of the year.

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Old 07-07-2018, 04:36 PM   #3
Confused about dryer sheets
Join Date: Jul 2018
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Thanks @pb4uski for the idea!

I checked it out and unfortunately that doesn't seem to be it; for some years, 0.18% x starting portfolio > Investment Expense, and in other years 0.18% x starting portfolio < Investment Expense.
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