When it comes to building lasting wealth through investments, one key factor that is often overlooked is the impact of fees. Many investors focus on finding the next hot stock or trendy investment opportunity, but fail to consider the long term effects of high fees on their overall returns.
In recent years, there has been a growing awareness of the importance of minimizing fees in order to maximize investment returns. This concept is known as the "prosperity prescription," and it involves dosing your investments with lower fees in order to achieve healthier returns over time.
High fees can eat away at your investment returns, significantly reducing the amount of wealth you are able to accumulate over time. By choosing investments with lower fees, you can ensure that more of your money is working for you, rather than lining the pockets of investment managers.
There are a number of ways you can reduce fees in your investment portfolio. One option is to invest in low cost index funds or exchange traded funds (ETFs) that track the performance of a specific market index. These funds typically have lower fees than actively managed mutual funds, making them a cost effective option for long term investors.
Another way to minimize fees is to work with a fee only financial advisor who charges a flat fee for their services, rather than earning commissions on the products they recommend. This can help you avoid hidden fees and conflicts of interest that can erode your returns over time.
By following the prosperity prescription and dosing your investments with lower fees, you can build lasting wealth and achieve healthier returns over the long term. By taking a proactive approach to managing fees in your investment portfolio, you can set yourself up for financial success and secure your financial future.