General information only, not medical, legal, tax, or investment advice. Consult a qualified professional.

Among similar funds, pick the lower fee

Best valueCost: freeEffect: largeEvidence C

In one line

A fee that is 1 point higher each year leaves you about 18% less after 20 years and about 26% less after 30, if the pre-fee return is the same.

What it costs

Free. Read the annual expense figure once before you buy.

What you get

0.99 to the 20th power is about 0.82, and to the 30th is about 0.74. That is the 18% and 26%. The arithmetic is the same when you compare similar options inside a NISA, an iDeCo, a 401(k), or an IRA.

How strong the evidence is

C. What the grades mean

Source

Compound-fee arithmetic. Book item 5-18.

Watch-outs

Not investment advice. Purchase and sale charges are extra. The book’s Chinese fee-cap rules were removed. The grade stays C, as in the book.

Adapted from HowToLiveBetter item 5-18.

Next habit

Best value

“Guaranteed high returns” is a no

If the same sentence promises a high return and a principal that cannot fall, decline before the pitch finishes. “I’ll try a small amount” is still a way in.

Cost: freeEffect: largeEvidence C

Best value

Don’t buy pricey supplements to “fix” the body

A bigger box does not turn the contents into medicine. If you want to show care, food or a trip to the clinic connects to the rest of the book better than a tonic.

Cost: freeEffect: largeEvidence C

Best value