Save Thousands on Mutual Fund Investments

If you are an average investor you probably invest in mutual funds. If you have a 401(k) at work you likely own mutual fund investments. How can I say this? Because in the vast majority of 401(k) plans, the vast majority of the investment options offered are mutual fund investments.

Mutual fund investments are designed for every-day people. Professionals handle the details for you when you invest in mutual funds. Usually the cost to you is reasonable, sometimes not so reasonable. Read on and learn how to invest in mutual funds and save thousands with no-load funds.

The following is a true story and happened just recently. A friend of mine, Jack, had $200,000 in a retirement plan he wanted to roll into an IRA. His retirement plan people hooked him up with one of their sales reps in New York , via telephone. After a 15-minute conversation, this fellow mailed Jack a personalized investment proposal to sign and send back.

Jack was confused by it all, so I took a look. Here is what I found. Please pay attention to the following: sales charges, expenses, and service fees.

All of the investments were mutual fund investments, from six different mutual fund companies. Also included in the package was a service agreement for him to sign. The following figures are a rough estimate of Jack’s costs for the first year under this plan.

Sales charges, averaging 4%, on $200,000…$8000.
Yearly fund expenses, averaging almost 1.5%…$3000.
Yearly fees for services rendered, at 1.5%…$3000.

The good news for Jack: the $8000 in sales charges comes right off the top of his $200,000, but he only pays it once. The bad news: the yearly expenses and fees continue year after year, and increase as his money grows.

Now let’s look at plan B. I hooked Jack up with no-load funds from the two biggest mutual fund companies in America, and saved my friend thousands. Check out these numbers.

Yearly fund expenses, averaging .5 % on $200,000…$1000.
Sales charges…zero
Yearly fees for ongoing services…zero

All mutual fund investments deduct yearly expenses when you invest in mutual funds. This is your cost for their professional management and other services. Many funds hit you with sales charges when you invest, no-load funds do not. Some folks in the financial services industry try to nail you with extra ongoing yearly fees. The reputable major no-load funds do not.

Be aware of the costs involved when you invest in mutual funds. Look twice before you sign a separate service agreement. Save thousands on your mutual fund investments with no-load funds.