Do No-Cost Mutual Funds Really Cost ZERO?

The short answer is NO!

The Basics of no-Cost Mutual Funds

No-cost mutual funds, also called no-load mutual funds, do typically cost less in terms of fees than mutual funds that charge a sales commission – or load.

But you will pay fees.  Fees are cleverly hidden in a number of cases, so it’s important to educate yourself about mutual funds before you invest your hard-earned money.  Though you won’t pay commission, you could pay:

  • Custodial Fees
  • Managerial Fees
  • Administrative Fees
  • Shareholder Servicing Fee
  • Revenue Sharing Fee
  • Transaction Costs

The fees are disclosed, of course, though it’s often nestled in the very fine print, and the way they’re assessed – by quietly taking the funds from your account annually – means it’s easy to miss the dollars trickling out of your investment account.

So is a No Cost mutual fund best option for your hard earned money?  According to Dalbar, over the past 20 years, the S&P 500 returned 9.2%. The average investor, however, made only 2.3%.

Fee’s aside, the average investor is not making enough in these types of funds to even keep up with inflation.   The fees discussed above are not even the biggest cost associated with most investments.   The biggest loss for the average investor is “opportunity cost.”

Lost Opportunity Cost

An opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen.  Every dollar that you allocate to a so-called no load mutual fund does in fact have hidden fees, subpar outcomes for most investors, and worst of all, opportunity cost.

Your alternative?  A cash value focused, “banking” policy.  A properly structured policy will lower your actual cost, and give you the opportunity to combat the hindering effects of inflation by giving you the ability to utilize the value of your capital through policy loans.

With a policy loan you will have the unique ability to effectively have your capital doing two jobs simultaneously.   What could you achieve if your dollar could accomplish both your short term and long term financial goals?

Remember when considering your investment options that “No Cost” does not really mean what it appears.  There are always real costs and opportunity costs.  Let us help you discover the possibilities of what Infinite Banking can do for you.

Paradigm Life Infinite 101 the Alternative to No Cost Mutual Funds

Paradigm Life Infinite 101