Advisors like to diminish them, providers like to disguise them and consumers often ignore them and rarely understand them. However, fees can make a major impact on your investment dollars if they aren’t kept in check.

For example, if your investment delivered an 8% return per year over a 30-year period of time and has the typical 3% per year bundle of underlying fees, your net annual return drops to just 5% (8% – 3%).

If you invested $100,000, your money would grow to just over $432,000 in 30 years. Or, if you are in the accumulation period and rather than a lump-sum, you invested $250 per month from age 25 to age 65, your money would grow to just over $381,000 in that time.

But, what if you were able to remove the fees and keep the full 8% return?  That same $100,000 would blossom into over $1,000,000.00 and the same $250 per month would grow to more than $872,000.00.

Does this mean that the typical 3% fee found in an average mutual fund would therefore eliminate more than 60% of your profits? Absolutely!

Welcome to compounding fees.

It’s time to ask yourself this question:

How much am I spending on unnecessary fees?