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2016 Investment Fee Review

January 3, 2017

 

 

I have written previously that I am a huge proponent of dividend investing in individual stocks over mutual funds. Even though there are many mutual funds with very low fees available, my goal over the long-term is to create my own mutual fund.

 

My own mutual fund will be well diversified with stocks I choose at my own price entry points. Hopefully, as my mutual funds get built up, so will the associated trading fees that I incur. Over time my fees will be lower than even the lowest mutual fund fees, and eventually, when I enter the realm of living off my passive income, there will be essentially no fees at all.

 

Brokerage Account

 

Ending Account Balance: $9,585.54

 

2016 Fees: $23.89

 

The fees in this account represented 0.249% of my investment balance. Considering the size of the balance in this account, this is great. I only made 3 trades in this account throughout the year, 2 buys and 1 sell. I expect a little more activity in this account this year, but hopefully with the increasing balance, my fees will decrease.

 

Rollover IRA

 

Ending Account Balance: $22,025.33

 

2016 Fees: $23.90

 

The only new capital infused into this account are my dividends, so typically the fees are going to stay low. The fees in the account were 0.109% of my balance. This is a great fee level, about the level of most inexpensive mutual funds like Vanguard. Unless a stock in this portfolio gets overvalued I expect only one transaction in this account for 2017, time will tell.

 

Roth IRA

 

Ending Account Balance: $37,637.85

 

2016 Fees: $73.56

 

This was by far my most active account in 2016 and the fees came out to be 0.195% of my ending balance. A little higher than I’d like, but I made some trades to lock in some profits late in the year. For 2017 I expect to make 3 purchases and cannot predict my potential sales at this time. Regardless, my account balance will hopefully climb and the fees should decrease significantly.

 

Total Fee Review

 

Total Account Balance: $69,248.51  Total Fees: $121.35  Fee %: 0.175%

 

I’m fairly pleased with my fees this year. My account balance still remains fairly low and so does my overall fee percentage. I am very much looking forward to continuing this series in the future and being able to hopefully see my fees go down.

 

I would love to eventually get my trading fees to stay below 0.02% of my portfolio in perpetuity. On a million-dollar portfolio this would be $200, or around 25 trades a year. This seems reasonable to me, I will only be able to know how achievable it is as the years pass by.

 

 

Does anyone else review their fees throughout to year to break down how much they’re spending on all their transactions throughout the year? I’d be interested to hear your results.

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