We’re talking about investment fees, of course. Little seen, little talked about, low investing fees.
You have to feel a little sorry for the really low fees. They don’t have big, shiny tags on them that say “WAS R3000, NOW R1000.” The purchaser doesn’t get that sense of instant gratification that they do when buying a pair of half price shoes. That’s because when you pay for your investment, money doesn’t physically change hands and no debit or credit card transaction takes place. It’s deducted from your investment, which happens quietly behind the scenes without you paying any attention.
But paying 1% (10X’s maximum fee before VAT) instead of 3% (the industry’s average fee) is a pretty spectacular saving. You’re getting two thirds off, and that can come to thousands of rands a year and millions over an investing lifetime.
That’s because the benefit doesn’t end with the already considerable savings. The money you save – rather than going back into your pocket or bank account – stays in your investment, to grow more and compound over many, many years.
This all sounds very peachy in theory but it really hits home when you see some real examples with real numbers. We like looking at real numbers, and we offer free comparisons to show people what they can save and, based on those savings, how much they can actually make.
We look at what people are paying elsewhere for their investments, what they would pay with 10X, and based on the fee saving, we forecast what they will retire with.
Here are the results of some comparisons we’ve done.
The previous two examples are simple, like-for-like comparisons of an identical lump sum. But sometimes providers charge termination penalties if you leave or cancel your policy early. Often, as in the following example, the lower fee more than makes up for that penalty.
In each of these examples, 10X’s past performance was better than the current provider’s, but because past performance is no guarantee of future performance, we assume the same rate of growth for the comparison (a real return of 8% after inflation and before fees).
Of course it’s easy for us to pick and choose favourable comparisons, but in fact we come out better in 9 out of 10 cases. Where we don’t, it’s usually due to a hefty penalty fee that the current provider would charge, with the customer being too close to retirement and not having enough years to make that penalty up through the benefit of lower fees.
It’s an example of our human irrationality that we’re enticed by comparatively small savings on less important purchases than our retirements. But if you’re curious to know how much a 10X investment can save and make you, ask us for a free comparison.
