The Hidden Expense

Free. The word evokes a different kind of feeling than what it actually means in today’s world. Make no mistake about it, absolutely nothing is free today. Even things that are said to be free have a hidden cost to them. Wherever you read that four-letter word, the omnipresent ‘conditions apply’ will be there as well. You always pay for what you get, one way or another. A price for every product and a charge for every service. A doctor charges you for his services, a consultant charges you for telling you what you probably already know and in the same vein, a mutual fund charges you for managing your money. The Expense Ratio is also known as Annual Recurring Expenses. This basket of charges comprises the fund management fee, agent co

This article was originally published on June 20, 2008.