Speaker 1: Welcome to Before Breakfast, a production of iHeartRadio.
Speaker 2: Good Morning. This is Laura, Welcome to the Before Breakfast podcast.
Speaker 2: Today's tip is that little fees on investments can add up.
Speaker 2: You want to be sure that your money is working
Speaker 2: hard for you and that you get as good.
Speaker 1: Of returns as possible.
Speaker 2: To help me with this tip, I invited Joel and
Speaker 2: Matt from the How to Money podcast to share strategies.
Speaker 3: They're with me.
Speaker 2: Here now as they have been for a few episodes
Speaker 2: this week. So Joel and Matt please take it away.
Speaker 3: Thanks Laura, and let's talk about fees. Because everyone wants
Speaker 3: to get rich quick scheme that might actually work, But
Speaker 3: the problem is those schemes never pan out in reality.
Speaker 3: And yeah, it'd be great if just one little hack
Speaker 3: could save you huge chunks of money in one fell swoop,
Speaker 3: if just a little bit of effort could create these massiversults.
Speaker 3: But the truth is that it's typically a lot of little,
Speaker 3: small financial leaks that are sinking our ships, perhaps dozens,
Speaker 3: But there is one thing that might be costing you
Speaker 3: thousands or potentially hundreds of thousands of dollars over the
Speaker 3: course of your life. And the truth is there's there's
Speaker 3: something you can do to rectify that situation, and it's
Speaker 3: not terribly difficult. What we want you to do is
Speaker 3: to swap your high fee funds for their low cost alternatives.
Speaker 4: You know it. Yeah, whether you are investing in a
Speaker 4: retirement or within a brokerage account, lowering the fees that
Speaker 4: you pay could save you a ton of money over
Speaker 4: your investing lifetime. So let's dive into some actual numbers
Speaker 4: here to illustrate the point. Let's imagine you are investing
Speaker 4: five hundred dollars a month and you're paying a one
Speaker 4: percent fee. Well, you might be shocked to hear this,
Speaker 4: but you are giving up nearly two hundred and seventy
Speaker 4: thousand dollars in fees over the course of forty years.
Speaker 4: So that means that instead of retiring with your portfolio
Speaker 4: sitting at a cool one point two million, well you'll
Speaker 4: only end up with nine hundred and twenty eight thousand dollars.
Speaker 4: I know which one I would rather have. That is
Speaker 4: a massive difference. And fees, it's just important to keep
Speaker 4: in mind that they really are the silent killer when
Speaker 4: it comes to your ability to build wealth.
Speaker 3: Yeah, it really is incredible just how much fees can
Speaker 3: rob us blind, and yet most of us have no
Speaker 3: idea what we're paying in fees on the funds that
Speaker 3: we're invested in. And it's also just kind of hard
Speaker 3: to commprehend how much a small fee can actually amount
Speaker 3: to highway robbery of your retirement account assets over time.
Speaker 3: Based on the numbers you just gave Matt those examples,
Speaker 3: that's great, And even on something as basic as like
Speaker 3: an S and P five hundred index fund, which is
Speaker 3: a great place for lots of investors to turn, the
Speaker 3: fees can be vastly different depending on which company you're
Speaker 3: using to make that investment. For example, Goggenheim charges more
Speaker 3: than one and a half percent for their basic S
Speaker 3: and P five hundred index fund. Compare that to Fidelity,
Speaker 3: who literally charges no fee at all on a virtually
Speaker 3: identical fund.
Speaker 4: That's right, Yeah, So let's talk about what you need
Speaker 4: to do in order to fix the situation. So much
Speaker 4: of it comes down to which company that you ought
Speaker 4: to keep your investments with. Are you doing business with
Speaker 4: a company that prioritizes low fees or not. Some of
Speaker 4: our favorite low cost companies are Vanguard, Fidelity, Charles Schwab.
Speaker 4: If your investments are not with one of those companies,
Speaker 4: we would suggest that you look at your last account
Speaker 4: statement in order to just figure out and assess how
Speaker 4: much it is that you're paying. If you can't find
Speaker 4: that statement, even just doing a simple Google search of
Speaker 4: the funds that you are invested in can provide you
Speaker 4: with that information. You might be in the clear if
Speaker 4: you're doing business with a company that isn't feeing you
Speaker 4: to death, but just given how much money is at stake,
Speaker 4: it is crucial to verify that firsthand.
Speaker 3: Yeah, and the good news is that in general, across
Speaker 3: the board, fees are coming down. That's largely thanks to
Speaker 3: index funds and these giant low cost companies, which is
Speaker 3: a great thing for investors everywhere. But like everything else,
Speaker 3: just because vices are coming down on average, doesn't mean
Speaker 3: that every company got the memo. There's still loads of
Speaker 3: companies charging fees that aren't in line with the new normal,
Speaker 3: And every day you continue to do business with a
Speaker 3: company like that, it's costing you real dollars that your
Speaker 3: future retired self would love to have.
Speaker 2: What great advice, Thank you, Joel and Matt. Paying attention
Speaker 2: to fees can help your nest egg grow faster, and really,
Speaker 2: who doesn't want that. For more great financial tips, please
Speaker 2: listen to Joel and Matt at the how to Money
Speaker 2: podcast and in the meantime, this is Laura. Thanks for listening,
Speaker 2: and here's to making the most of our time.
Speaker 1: Hey, everybody, I'd love to hear from you. You can
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Speaker 1: Breakfast pod. That's be the number four than breakfast pod.
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Speaker 2: Thanks so much.
Speaker 1: Should I look forward to staying in touch. Before Breakfast
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