Very hard to see, almost invisible, yet the damage termites can create can be very costly. Day one doesn’t hurt, neither does day 20 or 60, in fact you will never see the destruction until it’s too late.
The fees for your mutual funds are much the same.
90% of Canadian clients have their retirement money invested in mutual funds. Canadians pay among the highest fees in the developed world for these funds. But it’s not like you see them, the industry has been able to hide them. A little here, a little there. There are front end load, back end load, Segregated fund premiums, advisor fees, trailer fees, Management fees, Management expense Ratio’s, all confusing and some are hidden. You don’t write a cheque for any of the fees, it is deducted quarterly or annually from your investments, so you don’t feel the pain – until it’s too late.
According to Morningstar research (one of Canada’s most respected investment rating agencies) Canadians pay an average of 2.35% yearly for investing in these funds. That means those investments you have at the big 5 banks, investment advisory firms, or insurance companies are being deducted from your future as we speak. If you are loosing 2.35% every year to fees, you are not only loosing that money unnecessarily, but you are loosing all the growth in future years. As Einstein once said, “compound interest is the greatest force on earth”. Problem is, the investment firms know this all too well, and guess who is getting the benefit of the greatest force on earth? The investment industry.
For example: if you had $100,000 invested over 10 years, returning 5% with fees of 2.3% will earn you $29,600. You will have lost $33,880 of gains due to fees. Yes the termites have slowly eaten more of your returns than you received.
like the termites, these fees are slowly eating more of your returns than you are making on your investments.
There is a solution – REDUCE FEES. Over $1 trillion dollars have left these high cost funds and stampeded to low cost alternatives in the past 6 months. Every month you continue to pay high fees, your hard earned money is being eaten away.
Let us, at Middle Retirement coach you to reduce these fees and take control back of your hard earned money by simply understanding what you own.
"We are with you every step of the way."