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7. Investing in Mutual Funds > Calculate the Damage of Mutual Fund Expenses

Calculate the Damage of Mutual Fund Expenses

Calculate the hard cash you pay to own a fund to determine whether its expenses are worth the price.

Mutual funds with high expenses can put a serious hurt on your investment returns [Hack #59] . But how do you determine just how bad the damage is? Some web sites include estimated annual fees and compare a fund’s costs to the average for the fund category, but that’s just the beginning. The bottom line is how much more money would you have, if you didn’t have to pay those darned fees? If you’re trying to decide between several funds with similar investment philosophies, comparing your ending balance after several years, taking into account fund return and expenses, can help. You can use built-in Excel functions to calculate the potential cost of ownership and your bottom line return.


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