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Speaker 1: Welcome to Before Breakfast, a production of iHeartRadio.

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Speaker 2: Good Morning. This is Laura, Welcome to the Before Breakfast podcast.

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Speaker 2: Today's tip is that little fees on investments can add up.

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Speaker 2: You want to be sure that your money is working

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Speaker 2: hard for you and that you get as good.

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Speaker 1: Of returns as possible.

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Speaker 2: To help me with this tip, I invited Joel and

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Speaker 2: Matt from the How to Money podcast to share strategies.

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Speaker 3: They're with me.

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Speaker 2: Here now as they have been for a few episodes

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Speaker 2: this week. So Joel and Matt please take it away.

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Speaker 3: Thanks Laura, and let's talk about fees. Because everyone wants

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Speaker 3: to get rich quick scheme that might actually work, But

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Speaker 3: the problem is those schemes never pan out in reality.

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Speaker 3: And yeah, it'd be great if just one little hack

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Speaker 3: could save you huge chunks of money in one fell swoop,

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Speaker 3: if just a little bit of effort could create these massiversults.

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Speaker 3: But the truth is that it's typically a lot of little,

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Speaker 3: small financial leaks that are sinking our ships, perhaps dozens,

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Speaker 3: But there is one thing that might be costing you

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Speaker 3: thousands or potentially hundreds of thousands of dollars over the

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Speaker 3: course of your life. And the truth is there's there's

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Speaker 3: something you can do to rectify that situation, and it's

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Speaker 3: not terribly difficult. What we want you to do is

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Speaker 3: to swap your high fee funds for their low cost alternatives.

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Speaker 4: You know it. Yeah, whether you are investing in a

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Speaker 4: retirement or within a brokerage account, lowering the fees that

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Speaker 4: you pay could save you a ton of money over

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Speaker 4: your investing lifetime. So let's dive into some actual numbers

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Speaker 4: here to illustrate the point. Let's imagine you are investing

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Speaker 4: five hundred dollars a month and you're paying a one

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Speaker 4: percent fee. Well, you might be shocked to hear this,

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Speaker 4: but you are giving up nearly two hundred and seventy

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Speaker 4: thousand dollars in fees over the course of forty years.

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Speaker 4: So that means that instead of retiring with your portfolio

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Speaker 4: sitting at a cool one point two million, well you'll

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Speaker 4: only end up with nine hundred and twenty eight thousand dollars.

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Speaker 4: I know which one I would rather have. That is

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Speaker 4: a massive difference. And fees, it's just important to keep

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Speaker 4: in mind that they really are the silent killer when

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Speaker 4: it comes to your ability to build wealth.

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Speaker 3: Yeah, it really is incredible just how much fees can

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Speaker 3: rob us blind, and yet most of us have no

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Speaker 3: idea what we're paying in fees on the funds that

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Speaker 3: we're invested in. And it's also just kind of hard

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Speaker 3: to commprehend how much a small fee can actually amount

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Speaker 3: to highway robbery of your retirement account assets over time.

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Speaker 3: Based on the numbers you just gave Matt those examples,

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Speaker 3: that's great, And even on something as basic as like

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Speaker 3: an S and P five hundred index fund, which is

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Speaker 3: a great place for lots of investors to turn, the

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Speaker 3: fees can be vastly different depending on which company you're

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Speaker 3: using to make that investment. For example, Goggenheim charges more

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Speaker 3: than one and a half percent for their basic S

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Speaker 3: and P five hundred index fund. Compare that to Fidelity,

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Speaker 3: who literally charges no fee at all on a virtually

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Speaker 3: identical fund.

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Speaker 4: That's right, Yeah, So let's talk about what you need

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Speaker 4: to do in order to fix the situation. So much

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Speaker 4: of it comes down to which company that you ought

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Speaker 4: to keep your investments with. Are you doing business with

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Speaker 4: a company that prioritizes low fees or not. Some of

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Speaker 4: our favorite low cost companies are Vanguard, Fidelity, Charles Schwab.

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Speaker 4: If your investments are not with one of those companies,

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Speaker 4: we would suggest that you look at your last account

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Speaker 4: statement in order to just figure out and assess how

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Speaker 4: much it is that you're paying. If you can't find

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Speaker 4: that statement, even just doing a simple Google search of

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Speaker 4: the funds that you are invested in can provide you

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Speaker 4: with that information. You might be in the clear if

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Speaker 4: you're doing business with a company that isn't feeing you

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Speaker 4: to death, but just given how much money is at stake,

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Speaker 4: it is crucial to verify that firsthand.

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Speaker 3: Yeah, and the good news is that in general, across

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Speaker 3: the board, fees are coming down. That's largely thanks to

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Speaker 3: index funds and these giant low cost companies, which is

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Speaker 3: a great thing for investors everywhere. But like everything else,

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Speaker 3: just because vices are coming down on average, doesn't mean

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Speaker 3: that every company got the memo. There's still loads of

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Speaker 3: companies charging fees that aren't in line with the new normal,

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Speaker 3: And every day you continue to do business with a

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Speaker 3: company like that, it's costing you real dollars that your

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Speaker 3: future retired self would love to have.

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Speaker 2: What great advice, Thank you, Joel and Matt. Paying attention

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Speaker 2: to fees can help your nest egg grow faster, and really,

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Speaker 2: who doesn't want that. For more great financial tips, please

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Speaker 2: listen to Joel and Matt at the how to Money

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Speaker 2: podcast and in the meantime, this is Laura. Thanks for listening,

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Speaker 2: and here's to making the most of our time.

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Speaker 1: Hey, everybody, I'd love to hear from you. You can

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Speaker 1: send me your tips, your questions, or anything else. Just

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Speaker 1: connect with me on Twitter, Facebook and Instagram at before

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Speaker 1: Breakfast pod. That's be the number four than breakfast pod.

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Speaker 1: You can also shoot me an email at before Breakfast

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Speaker 1: Podcasts at iHeartMedia dot com that before Breakfast is spelled

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Speaker 1: out with all the letters.

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Speaker 2: Thanks so much.

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Speaker 1: Should I look forward to staying in touch. Before Breakfast

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