Fee drag.

In plain English

Fee drag is the long-run cost of the fees you pay to invest. A fee that looks tiny in one year, like 1 percent, compounds against you the same way your returns compound for you, so over decades it can quietly consume a large share of what you would otherwise have had. It shows up as fund expense ratios, advisory fees, and trading costs. Because fees are charged whether the market rises or falls, they are one of the few certainties in investing, which is why keeping them low is one of the highest-value moves a saver can make.

01Why it matters

Fees are one of the only parts of investing you fully control, and small differences compound into tens of thousands of dollars over a career.

02The math, step by step

Two investors each contribute the same amount for 40 years and earn the same 7 percent before fees. The one paying 1 percent a year instead of 0.05 percent ends up with roughly a third less money, purely from fee drag.

03What this is NOT