WEBVTT - Second Cup: How to get rich quicker

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<v Speaker 1>Welcome to Before Breakfast, a production of iHeartRadio.

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<v Speaker 2>Good Morning. This is Laura, Welcome to the Before Breakfast podcast.

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

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<v Speaker 2>You want to be sure that your money is working

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<v Speaker 2>hard for you and that you get as good.

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<v Speaker 1>Of returns as possible.

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<v Speaker 2>To help me with this tip, I invited Joel and

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<v Speaker 2>Matt from the How to Money podcast to share strategies.

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<v Speaker 3>They're with me.

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<v Speaker 2>Here now as they have been for a few episodes

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<v Speaker 2>this week. So Joel and Matt please take it away.

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

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<v Speaker 3>to get rich quick scheme that might actually work, But

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<v Speaker 3>the problem is those schemes never pan out in reality.

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<v Speaker 3>And yeah, it'd be great if just one little hack

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<v Speaker 3>could save you huge chunks of money in one fell swoop,

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<v Speaker 3>if just a little bit of effort could create these massiversults.

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

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<v Speaker 3>small financial leaks that are sinking our ships, perhaps dozens,

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<v Speaker 3>But there is one thing that might be costing you

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<v Speaker 3>thousands or potentially hundreds of thousands of dollars over the

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<v Speaker 3>course of your life. And the truth is there's there's

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<v Speaker 3>something you can do to rectify that situation, and it's

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<v Speaker 3>not terribly difficult. What we want you to do is

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<v Speaker 3>to swap your high fee funds for their low cost alternatives.

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<v Speaker 4>You know it. Yeah, whether you are investing in a

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<v Speaker 4>retirement or within a brokerage account, lowering the fees that

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<v Speaker 4>you pay could save you a ton of money over

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<v Speaker 4>your investing lifetime. So let's dive into some actual numbers

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<v Speaker 4>here to illustrate the point. Let's imagine you are investing

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<v Speaker 4>five hundred dollars a month and you're paying a one

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<v Speaker 4>percent fee. Well, you might be shocked to hear this,

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<v Speaker 4>but you are giving up nearly two hundred and seventy

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<v Speaker 4>thousand dollars in fees over the course of forty years.

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<v Speaker 4>So that means that instead of retiring with your portfolio

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<v Speaker 4>sitting at a cool one point two million, well you'll

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<v Speaker 4>only end up with nine hundred and twenty eight thousand dollars.

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<v Speaker 4>I know which one I would rather have. That is

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

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<v Speaker 4>in mind that they really are the silent killer when

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<v Speaker 4>it comes to your ability to build wealth.

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<v Speaker 3>Yeah, it really is incredible just how much fees can

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<v Speaker 3>rob us blind, and yet most of us have no

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<v Speaker 3>idea what we're paying in fees on the funds that

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

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<v Speaker 3>to commprehend how much a small fee can actually amount

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<v Speaker 3>to highway robbery of your retirement account assets over time.

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<v Speaker 3>Based on the numbers you just gave Matt those examples,

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<v Speaker 3>that's great, And even on something as basic as like

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<v Speaker 3>an S and P five hundred index fund, which is

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<v Speaker 3>a great place for lots of investors to turn, the

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<v Speaker 3>fees can be vastly different depending on which company you're

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<v Speaker 3>using to make that investment. For example, Goggenheim charges more

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<v Speaker 3>than one and a half percent for their basic S

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<v Speaker 3>and P five hundred index fund. Compare that to Fidelity,

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<v Speaker 3>who literally charges no fee at all on a virtually

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<v Speaker 3>identical fund.

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<v Speaker 4>That's right, Yeah, So let's talk about what you need

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<v Speaker 4>to do in order to fix the situation. So much

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<v Speaker 4>of it comes down to which company that you ought

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<v Speaker 4>to keep your investments with. Are you doing business with

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<v Speaker 4>a company that prioritizes low fees or not. Some of

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<v Speaker 4>our favorite low cost companies are Vanguard, Fidelity, Charles Schwab.

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<v Speaker 4>If your investments are not with one of those companies,

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<v Speaker 4>we would suggest that you look at your last account

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<v Speaker 4>statement in order to just figure out and assess how

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<v Speaker 4>much it is that you're paying. If you can't find

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<v Speaker 4>that statement, even just doing a simple Google search of

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<v Speaker 4>the funds that you are invested in can provide you

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<v Speaker 4>with that information. You might be in the clear if

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<v Speaker 4>you're doing business with a company that isn't feeing you

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<v Speaker 4>to death, but just given how much money is at stake,

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<v Speaker 4>it is crucial to verify that firsthand.

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<v Speaker 3>Yeah, and the good news is that in general, across

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

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<v Speaker 3>index funds and these giant low cost companies, which is

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<v Speaker 3>a great thing for investors everywhere. But like everything else,

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<v Speaker 3>just because vices are coming down on average, doesn't mean

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<v Speaker 3>that every company got the memo. There's still loads of

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

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<v Speaker 3>And every day you continue to do business with a

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<v Speaker 3>company like that, it's costing you real dollars that your

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<v Speaker 3>future retired self would love to have.

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<v Speaker 2>What great advice, Thank you, Joel and Matt. Paying attention

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<v Speaker 2>to fees can help your nest egg grow faster, and really,

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

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<v Speaker 2>listen to Joel and Matt at the how to Money

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<v Speaker 2>podcast and in the meantime, this is Laura. Thanks for listening,

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<v Speaker 2>and here's to making the most of our time.

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

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<v Speaker 1>send me your tips, your questions, or anything else. Just

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<v Speaker 1>connect with me on Twitter, Facebook and Instagram at before

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<v Speaker 1>Breakfast pod. That's be the number four than breakfast pod.

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<v Speaker 1>You can also shoot me an email at before Breakfast

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<v Speaker 1>Podcasts at iHeartMedia dot com that before Breakfast is spelled

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<v Speaker 1>out with all the letters.

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<v Speaker 2>Thanks so much.

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<v Speaker 1>Should I look forward to staying in touch. Before Breakfast

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