Decoder · Costs

Expense ratio

The yearly cost of running a fund, shown as a percentage of your money. A 0.05% ratio takes about 5 cents a year from every $100 you hold; a 1% ratio takes a full dollar. It is charged quietly, inside the fund — you never see a bill, which is why you have to look for the number yourself.

For your first $100: On your first $100 the difference is pennies. On thirty years of savings it is thousands. This is the one number beginners are taught to check before any other.

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