Guiding Principles Series – Principle 4 – “We pursue eliminating unnecessary investment costs and fees.”

Welcome to the Ten Talents Guiding Principles series! This article dives into Guiding Principle #4, “We pursue eliminating unnecessary investment costs and fees.” If you haven’t read the Introduction to the Guiding Principle series, you can check it out here.

Control what you can control

Have you ever heard the saying, “Control what you can control”? When it comes to your investments, you can’t control market movements, political events, or global disasters. But what you can control is the cost of the investments you purchase. Unfortunately, costs associated with investments can be difficult to understand. Intuitively, we would think that paying more would result in better quality or higher returns. In reality, the opposite is too often true. Jack Bogle, founder of Vanguard Group, is famous for saying, “In investing, realize that you get what you don’t pay for.”

Do your homework

When investing your hard-earned dollars, it pays to do your homework. If you prefer DIY homework, you can use investment research websites like For mutual funds or ETFs, researching expense ratios and fund turnover will help you get an idea of how much you’re paying to own a specific investment. If you participate in a 401(k) Plan, you can request a copy of the Plan’s fund lineup to see what investments are available to you and research those specific funds.

What’s that? Researching expense ratios and fund turnover is not your jam? You aren’t off the hook! You should research and find a fee-only financial planner. One who shares the same “control what you can control” values and will work on your behalf to do in-depth research and steer you into low-cost investments. Yes, you will pay your financial planner for their work, but a reasonably priced professional will pay for themselves many times over and free you to pursue things you actually enjoy.

Taxes are costs too

When you think about investment costs and fees, don’t forget about taxes! Aside from the cost of the actual investments, taxes are one of the largest “expenses” related to an investment portfolio. Certain investments are more tax-efficient in retirement accounts vs. brokerage accounts. It’s important to know the difference in order to minimize your tax bill. Before retirement, you want to be sure you invest both pre-tax dollars and after-tax dollars as part of your financial plan. Otherwise, you could end up with a larger tax bill in retirement than you expected. Once retired, you want to be sure and have a tax-efficient withdrawal strategy to minimize your tax cost on a year-to-year basis.

At Ten Talents, we pursue eliminating unnecessary investment costs and fees. There can be a financial seduction that by paying more, you will get more from your investments. On balance, we don’t believe this to be true. We believe our job is to help clients reduce the costs of their investments (including taxes!) by clearly understanding what they own and why they own it. By controlling what we can control, we have a better chance of meeting client financial goals.

– Kaleb Paddock, CFP®

You can learn more about Ten Talents and Kaleb, a financial planner based in Parker, CO, here.

This is part 4 of 7 of the Ten Talents Guiding Principles series. To learn more about the Guiding Principles series, please check out the Introduction here.

Leave a Comment

Planning ahead for retirement?

Get the 7 Essentials for Successful Investing in Retirement.