3 Ways You’re Losing Money Investing [Real Costs]
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How much are hidden fees and other investing costs holding you back from your goals?
Almost every investor makes one of these three investing mistakes and just one of them costs over $105,000. That means missed goals and more stress than you need.
The investing ‘entertainment' industry is set up to keep you scared and trading, racking up thousands in fees every year. Worst yet is that many of these are hidden fees designed to trick you into services you don't need.
By the end of this video, you’ll know the three biggest investment mistakes and how to avoid them.
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How Much Do Hidden Fees Cost Investors?
Today’s video is one I can’t believe I haven’t done yet because it’s such an important part of investing and reaching your financial future but unfortunately it’s also one that derails so many investors.
The median household has just $148,000 saved for retirement by 65, that’s enough for about $500 a month to live on. Now I’m not including social security because do you really want to depend on that being there with the yahoos in government?
Even with social security though, that only adds about $1,300 to your monthly income and means ramen noodles and basic cable for the rest of your life.
This all means that investors need to squeeze every penny out of their investments. Booking those solid returns over decades.
But there are three forces working against you, three investing mistakes that cost investors tens of thousands of dollars.
Three Biggest Investing Costs Destroying Your Portfolio
I’m going to highlight these three investing mistakes as well as what you can do to avoid them. I’ll start with the smallest and work up from there so be sure to watch all three of these.
I’m also putting everything together for a live webinar on how you can create a custom investing strategy perfect for your goals. I’ll show you how I invest my own money, in fact how I beat the market’s return by not playing the market’s game.
Reserve Your Spot to this Free Investing Webinar
Advisor Costs to Your Investments
Our first investor mistake is a big one, like $105,000 big! The average investment advisor will charge you 1% a year on your investments. You’ll also be paying a fee of about 1% on the mutual funds they suggest. Most people don’t know it but advisors get commissions and other kickbacks by selling people into a specific group of mutual funds.
Whether it’s direct commissions or something called soft-dollars, it’s big money, your money.
Now you’ve heard the fact that most advisors and money managers don’t beat the market and it’s here where most of your money is lost. As an example, let’s say you start with $10,000 and invest $200 a month. Those fees get taken out of your money every year. Not only do you lose that money but you lose the ability to earn returns on it.
It’s the advisor’s money now, they’re earning the returns.
If you were to earn a 7% rate over 30 years with the advisor, your portfolio would grow to nearly $200,000 – not bad and the advisor is going to talk that up. What they aren’t going to show you is how much those fees cost you over the three decades, over $105,000!
I know investing can seem overwhelming and it’s tough to know where to start but do you think just a few hours of your time is worth $105,000?
I worked as an equity analyst and as an advisor. I can tell you, there’s nothing difficult about doing your own investing. In fact, in that webinar, I’ll show you how to put together a plan that will take all of three hours of your time a year at most.
Bad Investing Decisions Cost You Thousands
Bad investing decisions are our second source of lost money for investors. Researcher DALBAR found that investors earned an average return of just 2.6% a year on their portfolios in the decade to 2013. That’s less than half a percent above inflation and all while stocks averaged 7.4% a year.
It’s those bad investing decisions like panic selling and getting caught up in hot stocks and it’s about to get worse.
Following common warning signs for a recession including interest rates and margins, the risk of a stock crash in the next few years has increased significantly. I’m not saying it’s happening this year but it’s on the way and is going to destroy stock prices.
The good news is that you don’t have to time the market or beat it. You only need to beat your goals and that becomes infinitely easier when you invest according to a plan.
That means keeping to a regular schedule of rebalancing your investments and diversifying across asset classes that are going to protect your money.
How Much is Under-Investing Costing You?
Our third investing mistake, and this is the one that costs the most pain, is under-investing.
Two in three Americans have nothing saved, that’s not just investments but nothing in savings either. In fact, Bankrate found that only four in ten Americans would have enough to cover a $1,000 emergency without borrowing.
And it’s a huge missed opportunity to create that financial future you deserve. Just $50 a month turns into $185,000 if you start in your 20s and over $91,000 if you wait to your 30s.
Think about that, for the amount you’re spending to argue about who get’s the last piece of bloomin onion, you’re out nearly two hundred grand!
Sure, investing can seem overwhelming and even if you get started, you’re always worried that you’ll make a mistake that will destroy your nest egg but you absolutely have to get started. You saw there how time turns just a small amount into hundreds of thousands.
I spent 10 years as an equity analyst for venture cap and private wealth managers before I started helping individual investors. Now I’m opening up my own portfolio, the stress-free strategy I use to beat my goals and actually beat the market in the process.
In the live webinar linked below, I’ll outline how you can put together your own custom strategy. I’ll guide you through it step-by-step and even answer any questions at the end.
Watch this Live Webinar to Get Started on Your Personalized Investing Strategy
Investing costs are one of those things that destroys wealth because you don't see it happening. You might see your returns go up and down but you don't see all the hidden fees and other advisor costs. Stop losing money on investing services you don't need.
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