Fees Drastically Reduce Investment Returns

A large portion of the population has at least some of their investments in a product called mutual funds. This type of investment allows you to diversify your portfolio and spread your money and risk over several companies which is great. The downside is that most have fees call a Management Expense Ratio or “MER” which are drawn from your account each year regardless of how your investments have performed.

The graph below represents a $100,000 investment earning 8% per year over 25 years.

The bars in grey have a 2.5% annual fee (MER) which is fairly common in mutual funds. After 25 years, your portfolio will be worth $361,700. 

The green bars represent a typical real estate investment through Mitch Parker Group where there are never any annual management fees. That exact same investment will grow to an amazing $684,900!

MER chart

While 2.5% doesn’t seem like a lot, the impact over a 25-year period makes it easy to see which investment makes financial sense.

Leave a Reply

Your email address will not be published. Required fields are marked *