Investing is one of the best methods of building wealth over a long period of time. However, many people struggle to find additional money to invest every year.
Additionally, investment fees are an expense that few people take into consideration. Plus, if you pay for professional investment advice, one’s costs only continue to rise. If you wish to dive into the realm of investing, yet reduce its associated fees, you must learn more about investing for yourself.
Utilize index funds
The best way to reduce your investment fees is to simply purchase an index fund, which tracks the market. Unlike a mutual fund, this is not an investment that is actively managed. Instead, it is simply an investment vehicle that will follow the overall direction of the market. However, this passively managed fund will not help you beat the market returns. Instead, it proves itself to be the perfect tool for those who simply want to get started in investing.
Learn the power of negotiation
Another great method of reducing investment fees is negotiating with one’s financial advisor. Financial planners want your business, and they will probably give you a lower rate if you just ask. A small percentage decrease in your investment fees could make a sizable impact on how much money you are spending on your financial ventures.
Embrace the value of advice
There are some people who believe that investment fees are worth the money. If you have a financial advisor who can consistently beat the market, their quality advice is certainly worth paying for, as you will earn higher investment returns on your money and therefore gain more wealth over time.
However, if your advisor does not have the most stellar track record, or you simply do not find value in these services, you should continue to seek ways to reduce your overall costs.
Looking to the future of investing
One of the most exciting aspects of the future of investing is that many investors can manage their portfolio without outside intervention. One can trade as frequently as they want with all of the new technology that is available today. Some people can even choose to buy and sell stocks from their phone — a fun and exciting way to remain engaged in the market.
However, it is important that one does not get too carried away with their trading, as studies show that active investors tend to have lower returns than those who buy pursue more passive methods of investing.