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The "Coolest" Calculator I've Ever Seen to Determine Actual Fees in Mutual Funds

By Roccy M. DeFrancesco, JD, CWPP™, CAPP™ - Email Editor

Dear Valued Reader,

To sign up so you can start using this powerful calculator today, please click here.

I'm a big fan of using calculators to help clients determine the "real-world" math supporting the use of various wealth-building tools.

If you are interested in paying off your home mortgage early with a simple plan that doesn't require you to change your lifestyle, please click here to learn about H.E.A.P.™ If you have any questions about H.E.A.P.™ or would like me to run numbers to determine specifically how the plan would work for you, please feel free to respond to this e-mail with an inquiry.

Determining how much it really costs to invest in specific mutual funds

People blindly pour significant amounts of their investable dollars into mutual funds every year. Unfortunately, most have NO IDEA how much it will cost for the privilege of investing in various funds.

Now even consumers (non-advisors) can find out how much it costs to invest in mutual funds by using a very simple online calculator.

The online calculator will blow your mind. It literally lets you pick from over 18,000 mutual funds and determine the actual fees that would have been paid when investing in the funds over the last 5, 10, 15+ years.

Let's look at an example of this powerful calculator. Assume an investor (45 year old male) invested $100,000 in the Allianz AGIC Emerging Markets Opportunities Fund Class C [AOTCX] 20 years ago, and it earned 8.0% each year.

-Value after 20 years: $282,146

-Gain:      $182,146

-Total Fees:      $ 88,156

That's really pricey. The net return is 5.35%.

Not all funds are so egregious. Let’s look at the much leaner American Fund [AGTHX] using the same $100,000 investment and gross rate of return.

-Value after 20 years: $391,810

-Gain:      $291,810

-Total Fees:      $ 32,583

This is much better than the international fund, and the net return is 7.07%. When trying to determine if using mutual funds make the most sense to grow your wealth, this calculator can be invaluable.

Comparing mutual funds to Retirement Life™ for retirement income. Now let's compare cash value life insurance to the above-listed mutual funds. I'll take the accumulated value of both mutual funds after 20 years and will let them continue to grow at their assumed net rate of return. Then I'll take equal/level withdrawals from ages 66-90 (25 years). At the end of 25 years, the accounts will have a zero balance.

-From the Allianz fund every year:      $20,833

-From the American Fund every year:      $33,832

The question that I answer in my book, Retiring Without Risk, is how cash value life insurance compares to mutual funds. To compare for this newsletter, I'll assume the example investor pays $20,000 a year for five years into Retirement Life™ and then lets it grow until age 65.

How much could be removed from Retirement Life™ each year after taxes and after expenses from ages 66-90? $35,783.

Amazing isn't it? Most advisors do NOT know the math behind using Retirement Life™ to help a client grow a tax-favorable retirement nest egg (which is done without market risk). That's why I wrote Retiring Without Risk and my new book Bad Advisors: How to Identify Them; How to Avoid Them.

If you have any questions about using the mutual fund expense calculator, if you would like information on Retirement Life™; or, if you simply would like to discuss the viable wealth-building tools available to help you grow your wealth for retirement, please feel free to e-mail me at info@trustmakers.com and set up a time when we can discuss your situation.

Call 888.916.7070 or email info@trustmakers.com

Until next time,

Roccy M. DeFrancesco, JD, CWPP™, CAPP™

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