One aspect that people stubbornly ignore in discussions of this kind is that nobody, in particular no 401k investor, has all his or her money at the beginning of the 50 year or so investment period. People start with a small amount, then add to that over the years. So each year, the principal grows via compounding and via addition of a certain amount. I am not going to bloat this thread with more math; it's not hard to do it right, and the fact remains that by and large, Wall Street fees are outrageous. I just want to remind everybody that all performance considerations must take into account that a real-life investor's account is subject to deposits (and eventually, withdrawals as well). Ok, self-praise is no recommendation, but I think I have all this pretty much figured out: check out greaterthanzero.com .