Over several decades of retirement increases in the cost of living requires you to double your income every twenty years or so just to keep up. So, your $40,000 income at retirement would have to grow to $80,000 in twenty years to keep even with inflation. That doubling assumes an annual average inflation of 3% per year.

Actively managed mutual funds, the ones favored by Wall Street, can charge you anywhere from 3% to 6% per year of your entire account balance. Overcoming the unavoidable 3% annual inflation rate is difficult enough. Add in a yearly 3% to 6% drain of your investments and your ability to outlive your money is seriously crippled.

Wait a minute, many people say, I am not being charged anywhere near 3% to 6% annually for my mutual funds. You may not think so because you never see much of the cost you are paying every year. Most people are aware of the fund’s annual expense fee because that number is reasonably well publicized. However, there are hidden costs that most people never see because Wall Street has arranged it so that these charges are made without informing you. These charges are deducted from your account monthly without your knowledge.

Costs to you in your mutual fund include explicit and implicit trading fees (the fund has to pay to trade) opportunity costs (the 5% taken off the top when you buy the fund not working in your account), and taxes passed on to you for the turnover of constantly buying and selling in the fund.

Inflation’s impact on your financial future is something you cannot control. The cost of actively managed mutual funds is something you can control.

Do yourself a huge favor and investigate how much you are really paying for your actively managed mutual fund. Controlling your investment costs is a large part of building your Retirement Money Machine.