Dave Stanley

Integrity Financial Service, LLC

Have You Considered The Cost Of Money Management?

Fees Can Really Cost You When it comes to investing, every little bit counts. And while a small annual fee may not seem like a big deal at the time, it can add up over the years and significantly impact your investment returns. For example, let’s say your portfolio is at $500,000.00 and you are paying a 1.5% annual advisory fee. If your average growth rate per year is 5% then your advisory fee would also grow by 5% per year.  The S&P 500 has averaged 9.8% over the past 30 years so I’m being conservative here. So back to the 1.5% advisory fee on a $500,000.00 account. That would start out at $7,500.00 per year in advisory fees and would increase each year as your account value increases. What if I could save you that advisory fee and get you just a nominal 5% return on that fee each year? What would that turn into in just 10 years? $122, 167.00.  In 15 years, it turns into $233,879.00, in 20 years, $397,995.00, and in 30 years, $972,437.00. May I remind you we’re only talking about a 1.5% recurring annual advisory fee? That fee has cost you almost a million dollars in 30 years! What if we use a $750,000.00 portfolio and the same 1.5% advisory fee, but what if I could save you that fee and get the same 5% return on that fee? In 10 years, that fee has cost you $183,250.00, in 15 years, $350,820.00, in 20 years, $596,992.00, and in 30 years, $1,458,656.00! Now let’s take a $1,000,000.00 portfolio and calculate that 1.5% advisory fee, which would start out at $15,000.00 per year in fees. If that fee could be saved and invested at 5% interest, what does that turn into in 10 years? $244,334.00. In 15 years, $467,759.00; in 20 years, $796, 989.00; in 30 years, $1,944,874.00! As you can see, the cost of a small, recurring annual fee can be significant, especially for larger investment accounts. By carefully considering all fees and choosing options with the lowest possible fees, you can maximize your investment returns and achieve your financial goals and peace of mind. It’s important to keep in mind that these examples are just estimates and are based on a number of assumptions, including the size of the investment, the average annual return, and the length of time the investment is held. In reality, the impact of fees on your investment returns may be different, depending on your specific circumstances. In summary, it’s essential to be aware of the fees associated with your investments because most people don’t have a clue what they’re paying in fees and to choose options with the lowest possible fees in order to maximize your returns. By doing so, you can maximize your chances of achieving your financial goals and ensuring a secure financial future. Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.   It is an Instant Download.  Here is a link to download our guide:  Safe Money Guide - Annuity.com The exception is any article about life insurance.  For ant life insurance articles, please use this one.  
Dave Stanley picture

Dave Stanley

Integrity Financial Service, LLC

185 44th St. SW

Suite A

Grandville, Michigan 49418

dave.stanley@retirevillage.com

(616) 719-1979

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