Investment Fee Calculator
See what a fund expense ratio really costs over decades, by comparing the same portfolio gross and net of the fee.
Want to understand the concept, not just the number? Read What a 1% Fee Really Costs .
How it's calculated
A fund expense ratio sounds tiny. One percent a year barely registers next to the ups and downs of the market. But a fee is charged every single year on your whole balance, and the money it takes can no longer compound for you. Over a few decades that quiet drag can swallow a startling share of what you would have had.
Work the default. You start with $10,000, add $500 a month, and earn 7 percent a year for 30 years. With no fee, that grows to about $691,150. Now charge a 1 percent expense ratio, which drops your net return to 6 percent, and the balance comes to about $562,483. The one percent fee cost you roughly $128,667, which is about 18.6 percent of the no-fee balance. You contributed $180,000 of your own money over those years, so the fee ate an amount worth most of a year of an average salary, all from a number that looked like a rounding error.
The reason the damage is so large is compounding working in reverse. Each year the fee is skimmed off before your money can grow, so you lose the return on the fee, and the return on that return, all the way out. This is why low-cost index funds, often charging under 0.1 percent, are such a powerful default. Move the expense ratio here between a cheap index fund and a typical active fund and watch how much of your future the difference decides.
Assumptions
- The fee is modeled as a reduction in the annual return, so the net return is the return before fees minus the expense ratio. Growth compounds monthly.
- Contributions and return are held level for the whole period. Real markets vary, but the gap the fee creates behaves much like this over time.
Last updated: 2026-08-08
These assumptions follow our general methodology.
Frequently asked questions
How much do investment fees really cost?
Far more than the percent suggests, because the fee is charged every year on your whole balance and compounds against you. A 1 percent expense ratio can cost 15 to 25 percent of your final balance over a few decades, turning a small annual number into a six-figure sum on a healthy portfolio.
What is an expense ratio?
It is the annual fee a fund charges as a percent of the money you have invested in it. A 0.5 percent expense ratio on a $100,000 balance is $500 a year, taken automatically out of the fund return. It is the main cost of owning a mutual fund or ETF.
What is a good expense ratio?
Lower is almost always better. Broad index funds often charge under 0.1 percent, while actively managed funds can charge 0.5 to 1 percent or more. Since few active funds beat a cheap index fund after fees, most investors are well served by keeping the expense ratio as low as possible.
Do fees matter more than picking the right fund?
Fees are one of the few things you can control and predict. Future returns are uncertain, but a fee is guaranteed to come out every year. Over a long horizon, choosing low-cost funds is one of the most reliable ways to end up with more, which is why it gets so much attention.