The Hidden Cost of Fees

The Rule of 72 exposes how much fees quietly cost you. An index fund charging 0.1% versus an active fund charging 1.5% looks trivial — a 1.4% gap. But that fee is subtracted from your return every year, so it shaves time off every doubling. Drop a 7% return to 5.5% and your doubling time stretches from about 10 years to 13. Over a 40-year career, that lag can mean one fewer doubling — roughly half your final balance lost to fees.