Mutual Fund Fees Siphon off 33% – 50% of Your Money Within 10-15 Years

Perhaps the typical 2% management fees charged by mutual funds and financial advisers don’t look too damaging at first glance-especially if you believe the managers will deliver on their market beating promises. But because of the Law of Compounding, taxes and fees paid to Wall Street to “beat the market” will compound over time and can easily take 33% of your money within 10 – 15 years.

The 2% you’re giving Wall Street can become 20% of lost investment profits when you consider the effect of Law of Compounding. If you factor the taxes you may pay as they churn your account, you can add another 1%, which means you’re going to give away 30%. But before you shut down the calculator, consider the sobering fact that when a fund does worse than the market, the loss will be even higher. And don’t forget about marketing charges and hefty sales loads on some funds. This kind of wealth erosion is eye opening to a lot of people, beginners as well as the average investor. With baby boomers now living well into their 80’s and 90’s, who can afford to put a nest egg in these hands?

Instead of turning to mutual funds and investment advisers, investing 101 of late would have you look to index mutual funds and exchange traded funds. These investment vehicles will keep your fees and taxes lower while earning you returns of leading indexes.