Tag Archives: investment costs

Who gets the Porsche — you or your investment firm? … Fees Matter! Introducing FWB TV

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The Financial Independence Hub is excited to unveil a new Internet video project on investing made possible by FWB TV,  a unit of Toronto based Financial Wealth Builders Securities.

Starting today and on a regular basis, the Hub’s sister site, Findependence.TV, will be housing video content provided by FWB TV Paul Philip CLU, CFP and his associates.  These high-quality videos generally run between two and four minutes and focus on investment strategies that are quite consistent with the content normally run on the Hub blogs.

You can find the first one by clicking on this headline:  Who gets the Porsche — you or your investment firm? … Fees Matter! Expect the next instalment in a week or two.

Q&A on the rationale for FWB TV

To introduce the series and explain the rationale, here is a Q&A between myself and FWB TV owner Paul Philip CLU, CFP:

Continue Reading…

Plain-Sight Strategy #3: Controlling Costs — Don’t spend more than you need to

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Paul Philip CLU, CFP

By Paul Philip CLU, CFP Financial Wealth Builders Securities.

Special to the Financial Independence Hub

In the first two installments of our three-part “Hidden in Plain Sight” investment strategy series, we’ve covered the importance of staying invested to earn market returns, while managing the risks involved. We’ll conclude with what may be the most obvious and powerful piece of advice of all, even if it does not seem to receive the attention it deserves.

  1. Being there
  2. Managing for market risks
  3. Controlling costs

Plain-Sight Strategy #3: Controlling Costs

Don’t spend more than you need to.

Why do investors spend more than they need to on their investments?

Revealing the Numbers

While spending less to earn more seems obvious, the costs themselves aren’t nearly as apparent. Continue Reading…

Lower trading fees aren’t an excuse to day-trade

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Stock Trader Overjoyed Looking At MonitorBy Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

As a Canadian investor, I’ve been pleased to see that most of the big bank brokerages lowered their cost per trade from $29 to under $10. Previously, most investors needed a minimum of $50,000 in assets to qualify for lower trade commissions.  This has presumably levelled the playing field for small investors.

When I first opened a discount brokerage account with TD Waterhouse (now TD Direct Investing) back in 2009, high trading commissions were the norm. I chose TD because I had an existing banking relationship and my $25,000 investment met the threshold to waive the $100 annual admin fee.

At the time I wasn’t aware of online brokerages like Questrade – which offered trades for as low as $4.95 with no administration fees.

High costs for small investors

The costs added up over the years. From 2009 to 2011 I made 36 trades and paid a total of $1,044 in fees. Had I been with Questrade, I would have paid a fraction of that amount – just $178.20 in trading fees. Continue Reading…

Stop Doing #4: Stop Picking Active Money Managers

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Steve Lowrie

By Steve Lowrie, Lowrie Financial 

Special to the Financial Independence Hub

Last month, we explored Jim Collins’ “Good to Great” suggestion that we would be well served by having a STOP-Doing List to pair with our To-Do Lists.

For starters, we advised investors to STOP reacting to market noise and start heeding the long-term evidence. Another worthy addition to your financial STOP-Doing List is to stop picking active money managers (or hiring someone else to try to do this for you).

As a reminder, my definition of an active money manager is someone who is engaging in some form of forecasting, whether it be picking stocks, timing markets or a combination of both.

Predicting the Unknowable
In our personal and financial lives alike, we worry about so many things that we cannot control. One of the greatest of these things is the future. When speaking with investors about the dangers of trying to accurately forecast the market’s or a stock’s pricing moves, many can accept that it’s difficult to succeed on their own. But the next leap is harder to make. Most investors want to believe that, while they may not personally have the time, energy or expertise to beat the market, they can still turn to well-heeled professional managers to do the forecasting for them.

Financial Services Attracts the Best and Brightest

In most pursuits in life, more practice and more experience makes perfect. So if someone is really good at some occupation or trade, it’s a safe assumption to assume he or she will continue to be good at it in the future.

However, active money management is different. Continue Reading…

Investment Fees Are Costing You Way More Than You Think … Here’s Why

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Vita Nelson

 By Vita Nelson, Editor and Publisher of Moneypaper’s Guide to Direct Investment Plans

Special to the Financial Independence Hub

You may not give much thought to the investment fees you pay. That’s because they seem so small. Right?

According to an October, 2014 survey by investment management firm Rebalance IRA, many Americans incorrectly believe they pay no fees in their retirement accounts. Among baby boomers between ages 50 and 68, all with full-time jobs, “forty-six per cent believed they paid nothing, and 19 per cent were under the impression that their fees totaled less than 0.5 per cent.” (In fact, research reveals that actual expenses average 1.5 per cent of their assets per year every year.)

Chances are that fees are costing you much more than you realize! Why?

Because the fee itself isn’t the real culprit. The real killer is the opportunity cost of not investing the money you’re spending on fees. That’s why John Bogle, founder of Vanguard, calls investment fees the “tyranny of compounding costs” in a recent Forbes interview.

The real cost of investment fees is the value of the shares you never bought, and how much those shares would have increased your wealth over the long term. That is, you’ve lost the compounding effect of owning those shares: the dividends that would have been paid to you on the shares and the compounding effect on those dividends. Continue Reading…