Fee drag as of · 277
In a household notebook, Fee drag is judged from . The line is ““Average return = my experience”” and the figure in the sum is 1. A blinking gain on a screen is not the reason. Worked examples below use round numbers for teaching. They are not forecasts, quotes or personalised projections.
A one-percent fee is not one percent of outcomes — compounding makes costs exponential too. Fee drag is the quiet subtraction of expense ratios, advice charges and trading costs from the rate that actually compounds for you. Fee drag sits in the engines family of this atlas: mechanisms first, products second, hype never.
Use the calculator for scenarios, then return to the section pages when you want the vocabulary behind the curve. No. Tool-Lifes pages are educational atlases. Decisions need your goals, constraints and, when appropriate, a licensed adviser. Do I need a high return for compounding to matter?
Higher net rates help, but time and contributions often dominate — especially early. Costs and behaviour can erase a “good” rate. Treat outputs as scenario sketches. Vary contribution, rate, fees and inflation to see which lever moves your goal date. Always ask whether a figure is nominal or real. A high nominal path can still lose purchasing power.
For Fee drag in , the figure that stays is 1, named ““Average return = my experience”.” Sparkle is not a figure.1
Figures to keep
- Year of the rule
- 1
- Figure in the sum
- 1
- Item
- Fee drag
- Reason kept
- “Average return = my experience”