Chapter 5 of 10All chapters
Chapter 5 of 10
Costs and tax
The certain drag.
Fees compound too
An annual charge is taken every year, on a growing balance. One percent against a tenth of a percent, over decades, is a large share of the final total.
- Compare total cost: fund fee, platform fee, transaction costs and spreads.
- Frequent trading multiplies costs and rarely improves results.
Tax wrappers
Most countries offer accounts where growth is untaxed or deferred. Using them is usually the largest single improvement available, and the specifics depend entirely on where you live.