From the course: Developing Investment Acumen
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Calculate fees: Follow the money
From the course: Developing Investment Acumen
Calculate fees: Follow the money
- Fees. They slowly, quietly sap away your gains and can jeopardize your long-term savings goals. Let's take a minute to learn how to identify and reduce the fees on your investments. Management fees are what you pay to the humans or robots who manage your money. These are often expressed in basis points or percentages. 200 basis points equal 2% which may not sound like much but taking 2% out of your principal each year can make a huge dent in your long-term earnings. Then there's fees on the investments themselves including transactional fees and expense rations. Transaction fees are simple understand. They occur when you do something like buy or sell an investment. Generally these fees are predictable and expected and because of competition in the investment industry, these fees are usually a lower fixed or low variable cost like a cost per share and best of all, these fees are visible. They appear on your statements so you can track them. But you need to be careful of a couple of…
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