Rule 15 of 19 · Chapter III — Let Time Do the Work
Keep your costs and fees low
Why this rule exists
Fees are small enough to ignore and large enough to change your life, which is exactly why they are dangerous. A percent here, a percent there sounds trivial, but it is charged every year on your whole balance, and it compounds against you just as your returns compound for you. Over a few decades, the difference between a cheap fund and an expensive one can quietly eat a large share of what you would otherwise have. You cannot control what the market returns, but you have real control over what you pay to participate.
In practice
Find out exactly what you are paying: expense ratios on funds, advisory fees, account charges, and the hidden costs buried in fine print. Favor low-cost options, because a fraction of a percent is achievable and worth insisting on. Be wary of anyone paid by commission to sell you products, and prefer transparent, flat, or fee-only arrangements where you can see the bill. Minimize needless trading, which racks up costs and taxes. Small savings on fees are among the few guaranteed improvements to your return you can actually make.
When it doesn't apply
Cheapest is not always best. Good advice, sound tax handling, or a fund that holds exactly what you need can be worth paying for. The point is to pay knowingly and get real value, not to chase zero. What you refuse to tolerate is a high fee delivering nothing.