Foundations · F4
Costs and Taxes
Two people saved the same money for thirty years. One ended with $65,000 less. Neither of them ever saw a charge for it: the fee came out inside the fund, before the price they checked. This module is about the two things taking a share of your money every year, fees and tax. They are also two of the few things in investing you can decide.
By the end of this module, you’ll be able to:
- Convert the MER on a fund’s ETF Facts into a dollar cost for the year.
- Explain why the same fee takes a larger share of a lower return.
- Explain why a fund’s fee is deducted inside the fund instead of billed separately.
- Ask what an investment costs and what you receive for that cost.
- Name four investment costs you can control.
- Explain how an account changes the tax treatment of the investment inside it.
6 parts · about 45 minutes
- 1What a fee actually costs: two savers, one fee apart
- 2Where the fees are: what they’re called, and why no bill arrives
- 3What changes the outcome: the four things you control
- 4What tax does to a return: the timing, the rate, and the three jars
- 5What your tax depends on, and why there are no dollar figures for it
- 6Your own fee, and what it’s buying you
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