Mistake 5 of 9
Ignoring fees
The mistake
A yearly fee of 2–3% sounds tiny, but over time it can eat a third or more of your gains. In Latin America, the currency spread on changing money is a hidden tax many people never notice on top of that.
The fix
Before you buy anything, write down the total annual cost — fund fee, broker commission, and currency spread if relevant — and compare it against the cheapest reasonable alternative. Make this comparison a habit, not a one-time check.
A concrete example
Over several decades, a fund charging 2% a year versus a similar one charging 0.3% can differ by roughly a third of the total final return — purely from cost, with identical underlying performance. Fees are one of the few things in investing you can control completely.
Frequently asked questions
What counts as a "high" fee?
For a broad index fund or ETF, anything meaningfully above roughly 0.5–1% a year is worth questioning — many low-cost options exist well below that. Actively managed funds often charge more, without reliably outperforming after fees.
How do I avoid losing money to currency spreads?
Compare the actual buy/sell rate a platform offers against the official or interbank rate before converting a large amount — the gap between them is the real cost, often larger than any stated commission.