Understand What You’re Paying!
Every investment has a cost and advice isn’t free, but it is an important first step to simply understand what you are actually paying.
Most investors don’t pay attention to this detail and it is easy to pay very high fees if you are investing in traditional mutual funds or structured products with a blind eye.
So make sure you have a clear understanding of all the fees that you are paying.
Why Do Costs Matter?
Investment costs can add up and compound along with your investment returns.
Imagine you have $100,000 invested and earned 6% a year for 25 years with no costs or fees, you’d actually end up with about $430,000.
If, on the other hand, you paid 2% a year in costs you’d only have about $260,000.
The 2% you paid every year would wipe out almost 40% of your final account value!
Disclaimer: This example is for illustration purposes only.