You’ve probably already visited and downloaded the Liberated Investor Guide—IF not, read this first and then go to: The Liberated Investor.

Tool #1: Eliminate Excessive Fees! If you know what you’re paying in fees you already know you’re paying too much. According to a Harvard University study, the asset management and securities industry grew from .4% of GDP in 1980 to 1.9% in 2006. Not only does this reflect the growth of assets and the portion that are managed professionally – but it also reflects the growth of the fees that are collected in the industry.

This single investor abuse was enough to motivate us to create The Liberated Investor.

Because investors know little about how fees are charged, what’s fair and how to negotiate their fees, many are paying too much. With compounding, we estimate the overpayments of 80 basis points per year for 25 – 30 years equals about 21% of an investor’s current wealth. In other words, the fees investors are paying are eating 21% of your nest egg. That’s a lot of money no matter how you look at it.

Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. But if fees and expenses go up to 1.5 percent, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent!

How many years of retirement can you afford to spend in fees to your advisor? Is your employer doing everything they can to drive those costs down? Are you as informed as you could be?

One way to combat high fees is through transparency. Once investors know what the fees are and the financial firms are held accountable – they will compete and drive prices down. But for now, investors need to be able to shop for deals.

In the first email supplement to the Liberated Investor Tool Kit, we’ll send you a simple calculator form that you can use to identify the fees you’re paying and whether or not you’re paying too much. Look out for that email from us! Download the Guide today and join the Liberated Movement!