In the world of investing, many people focus solely on the numbers and the potential returns that certain investments can bring. However, what often gets overlooked is the emotional toll that high fees can take on an individual's overall financial well being. The economic empath understands that reducing these emotional costs is just as important as building lasting wealth.
High fees can eat away at your investment returns, leaving you with less money to grow over time. This can be especially frustrating when you see that your hard earned money is being siphoned off by fees that seem to be taking more than their fair share. The emotional toll of feeling like you are being taken advantage of can be overwhelming, leading to stress, anxiety, and even a sense of helplessness.
But it doesn't have to be this way. By understanding the impact that fees can have on your investments, you can take steps to reduce them and build a stronger financial future. One way to do this is by choosing low cost index funds or exchange traded funds (ETFs) instead of actively managed funds that come with higher fees. These passive investment options typically have lower fees and can still provide solid returns over the long term.
Another way to reduce the emotional costs of high fees is to work with a financial advisor who has your best interests at heart. A fee only advisor, for example, is compensated solely by the fees that you pay for their services, rather than by commissions or kickbacks from investment products. This ensures that they are working in your best interest and can help you navigate the complex world of investing without feeling like you are being taken advantage of.
Ultimately, the economic empath understands that building lasting wealth is not just about the numbers on a spreadsheet, but also about the emotional well being that comes from feeling secure and in control of your financial future. By reducing the emotional costs of high fees and making smart investment choices, you can set yourself up for long term success and peace of mind.