I’m going to show you a simple way to maximize your investing return by controlling investment fees.
It’s just simple math once you understand how this all fits together.
I’m not saying anything revolutionary.
I’m just pointing out the obvious by applying the exact same principles of compounding.
In other words, it’s just taking a proven math principle and giving it a real world application.
That’s admittedly shocking.
The key idea is your financial advisor fees and expenses are charged as a percent of your assets.
That means the effect directly lowers your net return, all other things being equal.
More importantly, the effect on your portfolio growth is compounded.
What that means is those seemingly tiny advisory fees have an enormous impact on your investing return.
Let’s Put real numbers into the compound return calculator to test our intuitive analysis.
let’s assume $100,000 invested at 8% for 35 years.
Your future account value would be: $1,629,254.99.
However, that same $100,000 earning 6% (because remember, 2% was absorbed by high fees), only grew to: $812,355.15,
or a little less than half as much.
That means you’ll have half as much assets after 35 years using a high-cost personal financial advisor as you would using low-cost alternatives, all other things being equal.
50% of your retirement is gone because of that little 2% fee differential. Shocking, but true.
I don’t know about you, but the first time I figured that out it blew my mind.
That’s a life changing result!
The conclusion is simple, investment fees matter to the wealth growth component of your equation… a lot.
The reason investment fees are critically important is because they’re charged as a percent of assets, giving them a negative compound effect on portfolio growth.
So, what is the solution?
Well, luckily, there is.
You need to be careful and choose a low-cost index funds when you start investing.
To help you start, I prepare a FREE guide for you, Click Here to Download.
And if you are ready to take the first step, enroll in my course “Investing For Beginners: How To Invest With Confidence” HERE.
So, take that first step and start your investment journey today!