👋 Hey guys - Noah here,

A mate and I were chatting about investing the other day. We both planned to put away £500 each month into the stock market.

The only difference? He wanted to use his dad's financial advisor. I chose to do it myself.

"Mate, it's literally a tiny 1% fee," he laughed. "It's nothing and removes all the stress."

I raised my eyebrows. "That 'tiny' 1% fee will cost you hundreds of thousands of pounds."

He thought I was being dramatic. I wasn't.

The Hidden Maths Nobody Shows You

Let's look at what would happen after 12 years...

(Simulated performance does not guarantee future results)

With a 7% average market return, my friend's account would grow to about £95,000 with his advisor. Not bad at all! He'd be chuffed and still convinced that his advisor fee doesn't matter.

But what he wouldn't realise is how much that fee would already be costing him.

Fast forward another 28 years (40 years total of investing £500 monthly).

My friend's account would potentially reach around £2.1 million. Impressive! (assuming a 7% average return)

But my account? It would be sitting at roughly £2.75 million. (assuming a 7% average return, value of investments could go down as well as up)

That's over £600,000 more in my pocket. All because I avoided that "tiny" 1% fee.

Why Fees Matter So Much

Fees might seem small on paper, but they have two devastating effects:

1. They take money directly out of your account each year

2. You lose all the future growth that money would have earned

This is why even a small percentage difference compounds into enormous sums over decades.

What Most Financial Advisors Won't Tell You

For basic investing, most people don't need a financial advisor. (Not suitable for everyone’s financial situation) If you're simply putting money into a global index fund each month, you're paying someone thousands to click a button you could click yourself.

The financial industry relies on this perception that investing is too complicated for ordinary people. It's not.

The Simple Alternative

Instead of paying someone 1% to invest in an index fund, you can:

1. Open an investment account yourself (takes about 20 minutes)

2. Set up a direct debit for monthly contributions

3. Choose a low-cost global index fund

4. Check it once a year (or less!)

This approach requires maybe one hour of setup time and minimal maintenance. Is that worth saving £600,000? I think so!

The Platform I Use

I've been using InvestEngine for my ISA investments. They charge zero platform fees on their DIY account - no hidden charges whatsoever. (ETF costs apply)

They make money by offering premium services for those who want them, but their basic DIY investing service is completely free.

Right now, you can get a free bonus of up to £100 when you invest your first £100 with InvestEngine!

Start investing with InvestEngine here ⬅️

Must stay invested for at least 12 months, capital at risk and T&Cs apply

(I may earn a commission if you sign up using these links)

Remember, the best time to start investing was 20 years ago. The second best time is today. (Investment value can go up or down)

All the best,

Noah