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mutual fund expenses – your wealth’s biggest enemy …
mutual funds never advertise the actual amount , just a percentage of the total money / corpus
just imagine ,if you money has grown to 10 crores at the end of your 40 years of working , how much management fees , entry and exit fees ( total expenses ) have you paid ?
if they charge 3 % , it is almost 30 lakhs , a whopping amount , it is too large , that is why they quote the percentage , never the total amount ..
and if you give them the lump sum to manage , they will always make sure that they keep buying and selling , so that they keep generating brokerage charges ( this practice is called churn , by the way ) …
on top of that , there is entry and / or exit fees – the amount you pay when you enter and / or leave with your money and every year , there is management fees – which is always there even if the returns were less than the market index
you are better off with choosing a low cost index fund – that mimics the stock market index