Question 1

What counts as an investment fee?

Accepted Answer

Investment fees include fund expense ratios (TER), brokerage account fees, advisory or management fees, transaction commissions, and platform charges. This calculator focuses on recurring annual fees expressed as a percentage of assets under management.

Question 2

Why do small fees matter so much?

Accepted Answer

Fees compound just like returns — but in reverse. A 1% annual fee doesn't just take 1% of your money each year; it also removes the future growth that 1% would have generated. Over 30 years, a 1% fee can reduce your final portfolio by 25–30%.

Question 3

What is a typical expense ratio for an index fund?

Accepted Answer

Broad-market index ETFs often charge 0.03–0.20% per year. Actively managed funds typically charge 0.50–1.50%, and some specialty or hedge-fund-style products charge 2% or more.

Question 4

Does this calculator include transaction costs or taxes?

Accepted Answer

No. It models only a single recurring annual fee deducted from the portfolio balance. One-off transaction costs, bid-ask spreads, and taxes are not included.

Question 5

How can I reduce the fees I pay?

Accepted Answer

Choose low-cost index funds or ETFs, compare expense ratios before investing, avoid unnecessary trading, and question whether active management is adding enough value to justify its higher cost.

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