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Several weeks ago, I talked about the biggest cost, the underlying expenses of the mutual funds in your plan.
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If you invest in mutual funds or ETFs, you will pay underlying expense ratios.
One of the key secrets was being efficient with costs and operations, and understanding the underlying expense numbers on our income statements.
"The period from 1994 to 1998 was a time of record-low rates of growth in health insurance premiums and in the underlying medical expenses that are covered," the article said.
That doesn't include the underlying funds' expenses, which kick costs up to 2.75%, not including trading costs.
A quality independent adviser managing a $1M portfolio who utilizes mostly index funds/ETFs should have a management fee of 1% or less, an underlying investment expense of 0.4% or less, and minimal commission charges.
The second is to overstate a false good idea that will be the underlying cause of unnecessary expenses.
The pity is that while the actual results are relatively better, the underlying issue of pushing expenses onto supposed contractors and driving down their ability to make a living remains.
Most funds simply pass through the expenses of the underlying funds, but those costs vary significantly.
With a waiver that brings its expense ratio (including expenses of the underlying funds) down to 0.25%, it's not a bad buy.
It runs up costs of 2% a year, what with expenses on the underlying fund, a mortality charge and various assessments.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com