Use a long term investment calculator to understand the lifetime costs of excessive investment fees
High mutual fund fees and other excessive investment fees are huge problems for the average individual investor. These excessive investment fees are the major factor that undermines the financial welfare of millions of Americans. The potential value of your investment portfolio assets lost through excessive investment costs and compounded across your lifetime can be huge – even when your costs are “only” at the financial securities industry averages!
Average investment costs are not “just a few percent.” In fact, in any average year with average returns, a sophisticated compound investment calculator will demonstrate to you that average financial services industry investment fees will take away between 1/4 and 1/3 of your entire gross annual portfolio return. Since the investment fees you pay recur every year, these compounded annual investment costs year after year after year grow to be huge over years and decades. The financial services industry wins and you lose more and more.
Cutting investment fees is the single, best strategy that people have to improve their net investment returns.
At the same time, you can easily avoid high investment costs. The most significant personal investment success factor that your can control is to lower your investment costs.
When you drive the costs out of your investment portfolio, you give yourself a substantial head start over the average individual investor. You also cut down on trading and turnover in your portfolio, which simultaneously reduces trading costs, while it also cuts down on the completely unnecessary realization of some short-term capital gains taxes and long-term capital gains taxes.
VeriPlan’s fully automated retirement investment calculator spreadsheet software helps you understand the full impact of excessive mutual fund fees and other excessive investment fees over your lifetime
VeriPlan’s future value investment calculator functionality gives you fully automated investment cost-efficiency analysis — an incredibly valuable feature that you will not find in any other home investment calculator software. These valuable investment cost analysis features can help you to understand the cumulative impact of unproductive investment costs over the years.
VeriPlan’s investment growth calculator functionality automatically analyzes your future investment portfolio values across your lifetime, and it does this net of your projected investment fees and investment capital gains taxes. Once you enter the investment cost characteristics of your current portfolio, VeriPlan easily handles the rest of the analysis for you automatically.
VeriPlan develops projections that assume you will continue to acquire assets throughout your lifetime using the same level of cost-efficiency or cost-inefficiency that is apparent from your current investment portfolio. The VeriPlan financial investment calculator also provides an easy-to-use investment cost-effectiveness tool that allows you to develop hypothetical investment calculator projections that override your current investment fees in favor or lower and more reasonable investment costs. By flipping a single software switch, you can instead tell VeriPlan to develop future investment calculator projections that reflect any lower investment costs that you believe would be more reasonable to pay over your lifetime.
Here is an example of one of the cost-efficiency graphics automatically developed by the VeriPlan compounding investment calculator for all your projections.
If your current investment portfolio costs and mutual fund fees exceed your reasonable cost assumptions, then VeriPlan will automatically measure the cumulative value of the financial investment assets that you would lose in the future. VeriPlan’s fully automated mutual fund investment calculator and retirement planning calculator features will project your lifetime financial asset portfolio using your current investment fees and cost structure. Furthermore, it will show you what you could lose compared to more choosing investments with lower investment fees and lower total expense ratios, as you can see in the graphic above.
Every VeriPlan growth of investment calculator projection automatically develops full lifetime projections that include these five primary types of investment costs:
- Fees to buy investments (e.g. front end loads)
- Investment portfolio management fees (e.g. the management expense ratio)
- Annual marketing and sales fees (e.g. 12b-1 fees for investment funds)
- Fund trading costs (e.g. portfolio trading and market impact costs, which are indicated by rates of portfolio turnover)
- Personal account custody fees, commissions, and advisory fees (e.g. wrap account fees or annual percent of assets charges on account balances for advice and client services, which are in addition to portfolio management charges)
