Decimals That Steal Dollars

How High Fees Are Robbing You + How To Avoid

Author

Cade Invests
February 06, 2025

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Quote

Performance comes, performance goes. Fees never falter. - Warren Buffett

The Silent Investment Killer

What if I told you a 0.2% difference could cost you six figures in retirement. Well, it is true.

In this piece we are going to take a look at expense ratios.

These fees are percentage based, and are charged to the user every year. If you aren’t careful, a high fee fund could cost you thousands of dollars over time.

The problem is most are completely unaware of what kind of fees they are paying.

And hint hint, often they are paying more for crappier performance.

Here is some info to help you avoid being that person 👇️ 

Average Fee Ranges

Depending on the type of fund you invest in, the usual fee range will vary.

A general rule is that ETFs will typically have a lower cost when compared with their mutual fund counterparts.

To give you an idea (and keep you from getting ripped off) here is an average expense ratio based on whether the fund is actively managed or passively managed.

  • 0.48% - Index ETF (still higher than I like)

  • 0.73% - Actively Managed ETF

  • 0.81% - Index Mutual Fund

  • 1.02% - Actively Managed Mutual Fund

These can add up quick, so here is a list of some of the best low fee providers.

Low Fee Kings

If you are shopping around for some low fee ETFs the best place to start is fund providers known for, well, low fees.

Morning Star put together a good study below and it is no surprise that Vanguard is the winner of low cost investing.

The great thing about this list is that low fee doesn’t mean low budget. Vanguard, Fidelity, iShares are some of the best companies in the business.

Fund Fees Are Still Declining—but at a Slower Pace

How Fees Can Cost You

To put the nail in the high fee coffin, lets take a look at an example using two real funds. And yes, this actually happened.

In the low fee corner…VOO! (crowd goes wild)

In the high fee corner…SPICX! (BOOOOO)

Stats for this matchup:

VOO

  • Expense ratio: 0.03%

  • 10 year return average annual performance: 13.1%

SPICX

  • Expense ratio: 1.27%

  • 10 year average annual performance: 11.6%

Assuming you had $100,000 invested and it averaged an 11% return for 30 years here would be the result.

  • VOO Total: $2,270,000

  • SPICX Total:$1,620,000

That “small” 1.24% difference just cost you over $650,000. You basically just paid over half a million dollars to underperform the market.

Click here to check out the tool used to create the diagram above and play around with different fee scenarios.

Conclusion

High fees are a silent investment killer.

If you have no idea what kind of costs you are paying, you should take 15 minutes after reading this email to do a little digging.

It might make you another six figures. ~ Cade

Don’t miss the next email 👇️ 

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Check ‘Em out

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.