Investing

Pay Less for Investing Costs

1.

1. Slash Investing Costs They Drag Down Performance: The average diversified U.S. stock mutual fund charges 1.3% a year in expenses. If your fund isn't beating its benchmark (or you don't have the time to monitor actively managed funds), you're better off buying a low-cost index fund or ETF that hews to the benchmark. For instance, Fidelity Spartan 500 Index fund (symbol FSMKX), which tracks Standard & Poor's 500-stock index, has an annual expense ratio of just 0.10%. And indexing isn't a compromise strategy. Managers of many top pension funds and endowments swear by it.

Annual Savings: $1,200(based on cutting expenses from 1.3% to 0.10% on a $100,000 portfolio)

2. Keep Tabs on Your Trades: If you aren't an active trader, make sure you’re not penalized by a broker who charges an "inactivity fee." For example, E*Trade charges investors who don’t conduct any trades in a given three-month period $40 for the quarter.

Annual Savings: $160

3. Clone Your Favorite Manager: Sticking with no-load mutual funds is a strategy that can save thousands over time, and there is almost always a great no-load alternative to a load fund. For example, instead of shelling out a 4.75% load for Davis NY Venture A fund (NYVTX), go for the nearly identical Selected American Shares S fund (SLASX), which doesn’t have a sales charge.

Annual Savings: $235(avoiding a 4.75% load on a $5,000 investment)

4. Go With a Discount Broker: Full-service firms charge $30 or more for an online stock trade. But online brokers' fees average just $10, reports Aite Group, a financial research firm. We like E*Trade and TD Ameritrade for $10 trades. And be honest: Is your broker’s research worth the extra 20 bucks?

Or, trade for free. ZeccoTrading gives you ten free stock trades per month if you maintain a minimum balance of $25,000. Wells­Trade allows 100 free trades a year if you keep a total of $25,000 or more in Wells Fargo in almost all types of accounts.

Annual Savings: $240(using a discount broker for one trade per month)

TOTAL ANNUAL INVESTING SAVINGS: $1,835

Slideshow: Top Savings Tips for 2009

Save $50 a Day

Pay Less for Banking & Loans

Pay Less for Health and Insurance Costs

Pay Less for Utilities

Pay Less for Food

Pay Less for Transportation

Pay Less for Investing Costs

Pay Less for Leisure

Pay Less for Must-Have Trends

PLUS: How These Super Savers Do It

Most Popular

Is the Stock Market a House of Cards?
investing

Is the Stock Market a House of Cards?

The stock market volatility we’ve been experiencing and the apparent disconnect with the broader economy have some investors wondering just that. But …
October 12, 2020
Stock Market Holidays in 2020
Markets

Stock Market Holidays in 2020

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2020.
October 12, 2020
10 Worst Things to Keep in Your Wallet
Scams

10 Worst Things to Keep in Your Wallet

Storing your passport book or card, a spare key, or any of these other important items in your wallet leaves you open to identity theft -- or worse.
October 9, 2020

Recommended

States With Scary Death Taxes
inheritance

States With Scary Death Taxes

Federal estate taxes are no longer a problem for all but the extremely wealthy, but several states have their own estates taxes and inheritances taxes…
October 19, 2020
Considering Early Retirement? 5 Things to Know
Making Your Money Last

Considering Early Retirement? 5 Things to Know

Before you accept a buyout, do the math to see if you really can afford to retire. (We'll show you how.) Then follow up with these tried-and-true stra…
October 15, 2020
9 Tips for Better Time Management in Retirement
retirement

9 Tips for Better Time Management in Retirement

These important time management techniques will help destress your life as you get busier -- yes, busier -- in your golden years.
October 14, 2020
Check Your Financial Adviser Now (and Every Year) or Regret It Later
wealth management

Check Your Financial Adviser Now (and Every Year) or Regret It Later

Fewer than 10% of investors use such free background checks as Investor.gov, BrokerCheck or IAPD to check their financial advisers’ backgrounds. These…
September 21, 2020