How to maximize returns by minimising costs

It seems sometimes that online grocery and food delivery platforms take some sadistic pleasure trying to give you a false sense of accomplishment about saving money. For example, a few days ago I got a rare opportunity - a Rs 200 off coupon, free delivery, and exclusive 50 per cent off (up to Rs 100). I carefully selected items that I needed, and items I did not need, to make sure to hit the minimum spend amount for all the discounts. I expected to feel proud about my frugality, except the final payment was a mere Rs 10 lesser than the original amount. There are hidden charges - like 'convenience fees' and 'packing charges' - these platforms don't show while tallying the number of items in your cart that negate the effects of any benefits these platforms provide. Why was I buying things I did not need just to feel like I was saving money? Here's the point of this analogy - all services carry with them some hidden charge, mutual funds included. The issue arises when people start equating higher charges with better services. As investors, it is important to understand that the cost should reflect the service and not the other way around. Just because something costs more doesn't mean it is better. Let's discuss how to not let numbers take an advantage of you by understanding what expense ratios are and how they work. Who pays for mutual fund services? You. Just like restaurants charge you for service, mutual funds charge you for management. The convenience of having a professional handle your investments isn't free. The charge is called the expense ratio , which is the percentage of your investment that goes toward operational costs. Asset Management Companies (AMCs) hire fund managers, analysts, and support teams to research, trade, and manage funds. They also have expenses like technology, compliance, and marketing. Who covers these costs? You and oth

This article was originally published on March 19, 2025.