Do you know that when you invest your money, the financial industry takes 2%-2.5% of your money annually?
This is called a management fee.
But what you probably don’t know is that small commissions that can eat up most of your future returns and literally halve your retirement pot!
Think about it, how insane is that half of your saving just go to fees.
The total cost should be not more than 1.25%, for ex 1% to registered advisor and .20% for low-cost index fund like those offered through vanguard and Ishares.
The problem is that our brain can only do simple calculations: “2% out of $1,000?
1% of $1,000 equals $10, so 2% must be $20.
But, when you add a longer time period maybe 10, 20 or 30 years, our brain just can’t process the math anymore.
That is why we subconsciously make some assumptions:
“If 2% of my invested money is a small number, then a 2% annual fee can’t be a serious problem for me.”
But unfortunately, our brains fail us badly in this case.
The harsh reality is that, as a rule of thumb,
“2% annual fee halves your retirement pot in the long run”.
The financial industry knows this and takes full advantage of it.
That is why they will never explain the effect of commissions over the long run to you. Even if you have the best financial adviser, it just doesn’t happen.
“your broker is not your friend”
The sad truth is that the fund managers only care about their investment fees, they don’t care if you make a profit, they still continue to collect money from you even when you lose.
Although investing in mutual fund is an option to diversify, you should pay attention to their fees.
So, what are the alternatives what is the solution?
Well, luckily, there is, you don’t have to be caught in this trap.
And you can put a stop for this today.
To help you discover how to invest in low cost index and pay the lowest fees, I prepare a FREE guide for you, Click Here to Download.
And if you are ready to take the first step, learn how to control your financial future, enroll in my course “Investing For Beginners: How To Invest With Confidence” HERE.
So, take that first step and start your investment journey today!