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