True Cost Analysis

Assuming a maximum return from a balanced portfolio of 5%, and that the average fees (Management Expense Ratios – MERS) on mutual funds in Canada is 2.5%.

A $100,000 portfolio invested for the next 15 years, using the above figures, would cost you slightly over $90,000 in fess and lost opportunity

Here’s the breakdown:

• Growth of portfolio $105,125.90
• Total Fees at 2.5% equal $55,576.10
• Lost Return Potential because 2.5% is taken each year equals $35,185.76

In simpler terms, in order to earn $105,125.90 you would have to spend $90,761.86 (roughly half of your overall growth) to fees and lost opportunity costs.

Are you comfortable giving away half of your hard earned money? Don’t you deserve better?