Investment Fees Drag Calculator

What you are putting in today, before any entry charge is taken. The fee-free comparison keeps all of it, which is what makes an entry charge show up as a cost rather than disappearing from both sides.

Optional. What you add at the end of each month. Leave it blank if you are investing a lump sum and adding nothing. Money added later has less time to compound, so it raises the cost of the fees by less than it raises the balance.

How far apart the holding periods on the grid should be, in years. Five steps either side of the one you entered, floored at one year and capped at the fifty this model looks ahead. Four years around a thirty-year plan gives every horizon from ten to fifty.

How long before you sell or move the money. This is the input the answer is most sensitive to, because a fee taken early costs every year of growth after it; the same fee over ten years and over forty are different amounts of money by a factor of several.

How far apart the fee levels on the grid should be. It tries five steps either side of your own fee, floored at zero, so a quarter of a point around a one percent fee gives the grid a top row at no fee at all. It is a spacing for looking around, not a forecast: nothing here puts a probability on what you will be charged.

What you expect the investment to return each year before any fee is taken, as a share. It is applied as a twelfth a month. Both arms of the comparison are given the same figure, so the whole difference between them is the fee.

The ongoing annual charge, as a share of the balance, taken a twelfth at a time each month. It is the fund's ongoing charges figure or expense ratio, which is printed in the fund's own documents and differs between share classes of the same fund. Around 0.05 percent is an index tracker and around 1 percent is a traditional active fund.

Optional. A one-off charge taken off the deposit on the day you invest, as a share of it. Leave it blank if there is none, which is now usual. It costs more than its face value, because the money never arrives and so never compounds: five percent of a deposit is five percent of the terminal balance, not five percent of the deposit.

Optional. A second annual fee to run the same plan at, so you can price one fund against another. Leave it blank and the two comparison results stay blank rather than reading zero. Enter the cheaper fund's charge here to see what switching would have left you.

Machinery. Excel requires the formula being tabulated to sit in the grid's top-left corner, where it means nothing to a reader, so it is formatted away. It holds Total_Cost_Of_Fees.

The values down the left of the grid: the annual fee. Read a row to hold the fee fixed and vary the holding period. The middle entry is your own figure, and the axis is floored at zero. Where it reaches a fee of nothing the cost beside it is nothing too, unless you have entered an entry charge: the grid varies the annual fee alone, so that charge is still paid on every row.

Machinery, and NOT an input. The same for the holding-period axis: Excel substitutes into it while filling the grid, and the rest of the time it mirrors Years_Invested.

What the plan actually earned you each year once fees are out, measured as the closing balance over everything you put in. Compare it with the return you entered: the gap is wider than the fee, because the fee is charged on a balance the return has grown.

The values across the top of the grid: how long you stay invested. Read a column to hold the holding period fixed. The middle entry is your own figure, and the axis is floored at one year and capped at the fifty this model looks ahead.

The gap between the two balances, and the honest answer to what the fees cost. It is the fees you were charged plus the growth they never made, and the three figures always reconcile.

Every fee you were billed, added up, including any entry charge. This is the figure other calculators report and call the cost of the fees. It is not the cost: read the next two lines.

The deposit plus every monthly contribution. It is what the net annualised return is measured against, so a plan that adds money late will show a lower annualised figure than one that added the same money early.

Machinery, and NOT an input. Excel substitutes each value from the fee axis into this cell while it fills the grid; the rest of the time it mirrors Annual_Fee. Change Annual_Fee above, never this: the axis is derived from it, so editing the mirror moves the axis while the table walks and the grid comes out meaningless.

The body of the grid: what the fees cost, recomputed for every combination of the two axes. One hundred and twenty-one cells, each one the whole plan run again. It is a component of the table rather than a result on its own.

Reads OK, or explains why the inputs are not valid or why the answer deserves a second look.

The second fee's balance less your own. Positive means the fee you are comparing against is the better deal and this is what switching would have been worth. Blank until you enter a second fee.

What your own fee costs at the longest holding period the grid looks at. Read it against the headline cost to see how much of the answer is the fee and how much is the years.

What the same money, at the same return, would have grown to if nothing had ever been charged on it. It is not a balance anyone can actually get; it is the yardstick the cost is measured against.

What you are left with once the entry charge and every monthly fee have been taken. This is the figure that matters and the one a fund's own literature is least likely to show you.

What the same plan would have left you at the second fee, with the same return and the same entry charge. Blank until you enter a second fee.

The cost divided by the fees actually charged. One means the charge cost only itself, which happens only over a very short holding. Two and a half is ordinary for a one percent fee over thirty years, and it is the single number that says why "total fees paid" is the wrong figure to look at.

The return the money taken in fees would have earned for you had it stayed invested. It is the part every free tool leaves out, and on a long holding it is larger than the fees themselves.

The distance between the cheapest and the dearest outcome along your own row of the grid, from the shortest holding period it tries to the longest. It is how much of this answer is really an answer about your plans rather than about the fund.

What one more whole percentage point of annual fee would cost at your own holding period, read off the grid rather than asserted. It is the step from the middle row of the grid to the row below it, restated per point, so it moves with the fee you already pay: the first point costs more than the second.

The cost as a share of the balance you would have had. With nothing added each month it works out to exactly one minus (1 - monthly fee) compounded over the months, which does not depend on the return at all: a one percent fee costs about a quarter of the pot over thirty years whether the market does well or badly.