Fee drag calculator
A 1% annual fee does not feel like a drag in any single year. Across three decades, it compounds into roughly a quarter of your ending balance. A 2% fee takes nearly half. The math is unkind.
Drop in your numbers below and see exactly what the fee costs you in dollars and percent of ending balance.
Same starting capital, same contributions, same return rate. The only difference is the fee compounding against you for 30 years.
A few things worth noticing
The fee compounds, not just adds. One percent a year sounds small. Compounded across 30 years against a balance that is also compounding, the percentage of ending balance lost to fees is dramatically larger than 30 times 1%.
Time horizon makes it worse. Try the same calculator at 10 years vs 30. The fee drag is roughly linear early on and accelerates as the compounding base grows. The longer you invest, the more a small fee costs you.
The base case for active management is high. For an active manager to be worth a 1% fee, they have to deliver at least 1% of additional return per year, every year, just to break even with the no-fee alternative. Most don’t.
The publisher model is different. Advising Alpha charges a flat subscription, not a percentage of assets. Whether you have $10K invested or $1M, the cost is the same. That changes the math materially for long-horizon investors.
See the methodology behind the numbers
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