Saving Money on Investing
1. It is difficult for fund managers with years of experience to beat the market so why not just invest in S&P 500 index funds or whole market index funds with low fees. Investors will beat out actively managed funds most of the time.
2.Fire your full service broker that charge really high fees or a percentage of your assets. If your paying 1.5% on $100,000 your paying $1500 per year in fees. This means that you will have to make 1.5% more on your money to just break even before inflation. Get a low cost broker like Ameritrade or Etrade.
3. Dollar cost averaging can help smooth out the roller coaster that is investing. Invest fixed amounts of money over a period of years to invest more when the market is lower and less when the market is higher.
4. Escape taxes by investing in municipal bonds. Municipal bonds pay lower rates, but they are tax free from state and federal taxes if you buy municipal bonds from in-state issuers.
5. Save for college in a 529 college savings plan. The sooner you start saving in this account the sooner it starts to earn tax free returns for your child’s future.