Investment Fees
Investment Fee Calculator
See how fund fees and expense ratios erode long-term returns.
Investment Fee Calculator
All math runs locally in your browser. Nothing is uploaded.
How it works
A fee charged every year does not just cost you the fee; it also removes that money from future compounding. Over three decades, a 1% annual fee on a 7% returning portfolio can consume roughly a quarter of the final balance.
This tool shows the value with and without the fee side by side, so the true drag is impossible to miss. It is the strongest argument for low-cost index funds and for checking the expense ratio before you buy any fund.
Formula
Lost = P·(1 + r)n − P·(1 + r − f)n
P = principal, r = gross annual return, f = annual fee, n = years.
Worked example
Example: $10,000 at 7% for 30 years. No fee: 10000 × 1.07^30 = $76,123. With a 1% fee: 10000 × 1.06^30 = $57,435. The fee erodes $18,688, about 25% of the potential growth.
WORKED EXAMPLE — DEFAULT INPUTS
What to know
The math behind fee drag is unforgiving because the fee compounds against you. On a $100,000 portfolio at 7% over 30 years, a 1% fee costs roughly $72,000 of potential growth. The difference between a 0.05% index fund and a 1% managed fund on the same market return is often six figures over a working lifetime.
Fee awareness does not mean chasing the cheapest fund blindly; it means checking the expense ratio as part of the decision. Small differences in cost compound into large differences in outcomes, which is the one factor you control completely.
FAQ
How much does a 1% fee really cost?
On a 7% return over 30 years, 1% a year leaves you about 22% less than the no-fee result. The number shocks most people because the loss compounds.
What is a typical expense ratio?
Broad index funds often charge 0.03-0.20% a year; active funds commonly charge 0.75-1.5%. The difference compounds to a large gap over decades.
Does this include trading costs or taxes?
No. It covers the annual fee only. Trading costs, spreads and taxes would widen the gap further.
Should I switch funds for a lower fee?
Consider switching when the lower-fee fund has similar exposure. Beware realizing capital gains just to chase a slightly cheaper fund.