Manage and Lower Your Investment Expenses and Fees

Investment fees DO matter.  Don't invest in mutual funds that have high fees.  Don't pay a financial advisor more than a few percent of your assets each year.  Don't let your broker charge you for inactivity fees or high margin rates.  These fees really do make a difference in your long term return.

For example, if you invested $1,000 today, earned 10% each year, and paid fees of 5% each year, you would have $3,745 in 30 years.  If you invested the same amount of money but paid 3% in fees, you would have $7,000 in that same time frame.  If you paid only 1% in fees, you would have $12,900.  And if you paid no fees, you would have over $17,000.

In some cases it is worth paying the fees if you are earning a higher percent than the low fee providers, but this is rarely the case.  It is a fact that financial planners and money managers rarely perform better than the market averages, or than individual investors that stick to a simple diversified investing plan.