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officialrubytech · 7 years

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Sup fam , big hail and gratitude if u tuned into our session on Just Reality with CEO Bard International x Pipe Iron feat @sherenalicia x @supastarizzy @officialrubytech with our new track "INDEED" . Studio was full of positive energies , from #supafrost #vocalgod #malice #ashari #cickle #djgunner Here's a small peep into what u missed . Purest energy Call and request Shoutouts to @eliseusj @mohz_ugs @zer0_ugs @hat_ugs @shearnduval #indeed #newmusic #newenergy #premiere #justreality #hiphop #vibe #famous #top40 #top10 #quality #spotify #itunes #deezer #soundcloud #banger #speakergoinghammer #trapreggae #trapmusic #sherencarter #ugs #rubytech #supastar #246🇧🇧 #philly (at America/Barbados)

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smart-asset · 7 years

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The Newbie Investor’s Guide to Fees

New investors often focus on picking the right mix of funds to add to their portfolios based on their risk tolerance. While choosing the right investments is a big part of building wealth, it’s not the only factor that matters. There are certain costs that go along with investing that you can’t afford to overlook. Before diving in, it’s a good idea to familiarize yourself with some of the fees you’ll run into.

Transaction Fees

Investment fees can be lumped into two main groups: transaction fees and ongoing fees. Transaction fees are the costs you’ll pay when you buy or sell assets in your portfolio. For example, if you purchase shares of a specific stock through a broker, you’ll pay them a commission to execute the trade.

Brokers who deal with mutual funds can earn a commission called a sales load. This charge can be a front-end load that you’ll pay when you initially buy the fund or a back-end load that you’ll pay once you sell the fund. The Financial Industry Regulatory Authority (FINRA) caps the maximum sales load associated with a mutual fund at 8.5%. Certain mutual funds are no-load funds, meaning there’s no sales fee to trade them.

Back-end sales loads shouldn’t be confused with withdrawal fees, which are tacked on when you take non-qualified distributions from a tax-deferred retirement account. For example, if you were to pull money out of an IRA or 401(k) prior to age 59 1/2, you’d have to pay a 10% penalty for the early withdrawal, along with regular income tax.

Some funds also carry a 12b-1 fee, also known as a distribution fee. This is an annual fee that’s assessed to cover the cost of marketing and distributing the fund. Not all mutual funds have this fee and some of those that do roll it into the expense ratio. FINRA limits the 12b-1 fees to 0.75% of the fund’s average net assets.

Ongoing Fees

Ongoing fees are costs that you pay to maintain your holding in a particular asset. Advisor fees can either be upfront charges or ongoing expenses for investors. They are the fees that advisors or brokerage firms charge for helping investors choose funds and they’re calculated as a percentage of what’s invested. For instance, if the annual fee is 2% and you have $100,000 in holdings, you’d pay $2,000 a year for your advisor’s services.

Advisor fees are separate from the account maintenance or custodial fees that certain brokerages charge for managing investment accounts. These charges can either be flat fees or a certain percentage. These fees goes toward things like recordkeeping and account reporting.

One of the most important expenses beginning investors need to consider is the expense ratio. This is a fee that covers the operating costs for a fund on a yearly basis. Looking at the expense ratio is the easiest way to determine how much a particular investment is going to cost.

Expense ratios are expressed as a percentage and you can use them to evaluate and select mutual funds and exchange-traded funds. As a general rule, the lower the percentage is, the better. The expense ratio is deducted directly from any earnings on your investments. By weighing it against the fund’s annual returns, you’ll know how much you stand to profit each year.

Deducting Investment Fees

While investing fees can be a downer, there is some good news. Some of them are tax-deductible. A few of the things you can write off include certain IRA custodial fees, fees for investment advice, online service fees you pay to manage your account and charges associated with automatic investment plans.

You’ll have to itemize to claim an investment deduction and you can only claim expenses that exceed 2% of your adjusted gross income. If you’re paying a substantial amount in fees, it might be worth it to see if you qualify for the deduction. You may even be able to bump up your refund, which would leave you with more money to invest.

#$SPY #investing #investors #newbie investor #investing for beginners #beginner investor #investing fees

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