Investment Transaction Fees Can Eat You Alive

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If you are interested in investing, there’s one area you don’t want to neglect a study of. Pay particular attention to the transaction costs of your investments, because your very return depends on it. If you aren’t careful, you’ll be drilled nearly into oblivion by costs. These transactions costs are like warthogs, eating at your wealth garden. And they are fat and happy warthogs indeed.

Don’t let the transaction cost warthog loose in your wealth garden

If you let the transaction cost warthog lose in your garden, there won’t be enough money left at retirement to eat at McDonald’s 3 times a year. So do yourself a favor and

Things to keep in mind about investment accounts and transaction costs

• When companies are selling you a product, it’s rare they’ll tell you how much you’ll need to pay for every small transaction. Don’t assume anything is included in your account, and ask any specific questions you have about what costs what before you open your account.
• Costs like margin interest add up because they’re computed constantly. Investing on margin is like borrowing on credit cards, only worse. You don’t get any physical goods for the money, and the interest you pay monthly is hurting your return. Make sure you understand the ramifications of investing on margin.

So don’t say you haven’t been warned. Watch out for the transaction costs or the Warthog will have your ass.

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