About

Expense ratios are silent wealth destroyers. A fee of 1% or 2% might sound negligible, but over decades, it compounds into massive losses. This calculator does not just sum up the fees you pay; it calculates the "Opportunity Cost" - the potential growth you lose because that fee money was removed from your compounding snowball instead of staying invested.

This distinction is vital for long-term investors comparing ETFs, Mutual Funds, or Robo-advisors. By visualizing the gap between a "Fee-Free" scenario and a "Fee-Burdened" scenario, this tool highlights exactly what that percentage costs you in tangible terms, such as a lost luxury car or a delayed retirement year.

Formulas

The calculation runs two parallel Compound Interest scenarios. One uses the raw ReturnRate, the other uses NetRate:

NetRate = ReturnRate − FeeRate

The Opportunity Cost is the difference between the projected Future Values (FV):

LostWealth = FV(ReturnRate) − FV(NetRate)

This "Lost Wealth" represents money that was paid in fees AND the interest that money would have earned had it remained in the account.

Reference Data

Fund Type	Avg Expense Ratio	Cost per $10k/yr	Impact
Index ETF (Passive)	0.03% - 0.09%	$3 - $9	Negligible drag.
Target Date Fund	0.12% - 0.50%	$12 - $50	Moderate, worth convenience.
Active Mutual Fund	0.60% - 1.50%	$60 - $150	Significant long-term drag.
Financial Advisor	1.00% - 2.00%	$100 - $200	Very high opportunity cost.
Hedge Fund	2.00% + 20% Profit	$200++	Justifiable only by alpha.

Frequently Asked Questions

Yes. Over a 30-year period, a 1% fee can reduce your total portfolio value by nearly 25%. If you would have had $1,000,000, a 1% fee could leave you with only $750,000.

An expense ratio is the annual fee that funds charge their shareholders. It covers management, advertising (12b-1 fees), and administrative costs. It is automatically deducted from the fund's assets.

No. This tool focuses on recurring annual percentage fees (Expense Ratios or Advisory Fees). Front-end loads are one-time charges paid upon purchase and do not compound negatively in the same way annual fees do.

Switch to low-cost Index Funds or ETFs. Many have expense ratios as low as 0.03%. Avoid actively managed mutual funds unless they consistently outperform their benchmark after fees.