Last week, a reporter from The Canadian Press read my blog post on what a 2% investment fee costs over a lifetime and asked if she could interview me for a story on fees. It came out today and has been picked up by BNN Bloomberg and CTV. Fees are the reason I got into personal finance in the first place. At 18 I heard the Freakonomics episode "The Stupidest Thing You Can Do With Your Money," and I'd also watched my parents pay a little over 2% a year on their mutual funds without getting much tailored advice for it. On $100,000 invested, a 2% fee is $2,000 a year. It comes straight out of the fund's return, so you never get a bill in the mail and a lot of people don't realize they're paying it. Over 30 years at an assumed 8% a year, that $100,000 grows to about $952,000 with a 0.2% fee and about $574,000 with a 2% fee. That's roughly $377,000, or about 40% of what you would have ended up with. When she asked what people should do about it, my main answer was to ask any advisor up front how they get paid. Some advice is worth paying for. But if 2% a year gets you a fund pick and a phone call once a year, it's worth knowing what that costs in dollars before you sign up. You can read the full article here if you're interested. https://www.thecanadianpressnews.ca/business/are-investment-fees-worth-it-experts-say-they-must-meet-a-high-bar/article_837ca5d2-cdf8-5bb7-8e45-901f8218a2b8.html When did fees first click for you?
7,528 views
47 Comments
ETF Go
@etf.go · 14dEdited
Nice job Levi! Such a simple and important way people can keep more of what they earn yet everyday here on @blossom you have people building full portfolios of ultra high cost products. Fees were one of many reasons ETFs become more popular than mutual funds (along with traditional Index strategies persistently out performing active strategies) but today so many people are ignoring the longterm impact and reverting back to the exact performance drags we all move away from. Mind blowing! 🤯
Mahyar
@4mula4 · 14dEdited
@smallbird.financial Yeah, you laid out the math so clearly, too. The "invisible" nature of that 2% MER, no bill in the mail, just a quiet 40% chunk of compounding power stripped away over 30 years, is the exact trap so many investors fall into before they get their wake-up call. Asking advisors upfront how they get paid is easily the best starting piece of advice anyone could give. Congrats again on getting your message onto such a major platform, keep pushing this education out there! 😊
Not Financial Advice @anpc86 · 9d
Good, this message needs to get spread, the fees the older generation are ok paying is unnecessary… Good job
MissG
@let_it_ride · 14d
This is fantastic! Congrats Levi!
See the full comment section 👀Sign up for the full Blossom experience!
