By Rick Kahler via Iris.xyz

Investment fees matter. They can make a big difference to your financial health in the long run. Before you put money into any investment, it’s vital to uncover the real costs. They typically include these six types of fees:

1. An up-front commission earned by the salesperson or their firm.

Don’t rely on a vague assurance or a verbal answer: get a specific number in writing.

If you have trouble getting a number, ask, “If I buy this investment today and want to get out tomorrow, how much do I get back?” If the answer is not “all your money,” the difference is probably the upfront fees and commissions.

I don’t recommend purchasing financial products with significant upfront commission or costs. I have seen investments where these fees run as high as 30% of the money invested. If you were to earn 5% a year on the investment, it would take 8 years just to break even.

2. Ongoing advisory fees.

These are monthly, quarterly, or annual fees you pay advisors for their investment advice and oversight. This includes working with you to pick the asset classes, set the diversification, select the managers, tax optimization, rebalancing, and other periodic tasks.

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