Every fee is a sure loss, taken again every year, in good years and bad.
Costs compound too.
A fund charges 2% a year. Pull the line down to the share of your money it takes in 30 years.
A small yearly fee becomes a big share of the end.
← Red LinesRed Line 19 of 48 The idea The numbers Where you see it Where it bends This game’s numbersHow strong the proof is Where it comes from
A return may or may not come. A fee always does: every year, on everything you hold, and what it takes can never grow for you again.
€10,000 for 30 years in the same market at 7%: with a 0.2% fee about €72,000, with 1.5% about €50,000. The 1.3% difference took €22,000.
Index funds often charge 0.1% to 0.3% a year; many actively managed funds charge 1.5% or more. The number is on every EU fund’s key information document.
A cost that buys something real, like help you actually follow, can be worth it.
The maths: worked out on this page
=Outside the four steps: it follows from the arithmetic
True by the sumsA fee comes off every year, whatever the market does, so its cost grows with the years like a return in reverse. That is arithmetic.
- Presidential Address: The Cost of Active Investing Kenneth R. French, The Journal of Finance 63(4), 1537-1573, 2008
- Costs and Performance of EU Retail Investment Products 2025 European Securities and Markets Authority, ESMA market report, 2026
Checked 2 Nov 2026 · How we grade
- A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
- B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
- C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
- D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
- = True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.
John C. Bogle, The Little Book of Common Sense Investing (2007). In our words, not quoted.
See it in numbers: Fees (From Zero)
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