Lynn O'Shaughnessy

Can you remember the last time you received a bill for your mutual funds? Think hard. Maybe you paid it when you wrote the check to the cable company and for your credit cards. Or perhaps the invoice is still stashed in your stack of bills.

Actually, don't bother looking for it, because you never received one. The fund companies automatically pull their fees out of your accounts. In fact, you pay the mutual fund managers about as frequently as you reimburse Visa or MasterCard.

The frequency isn't what should gnaw at you. It's the enormity of the price tag that should grab your attention. Many investors are blithely sitting on a portfolio of expensive funds because they don't know they're being gouged.

Surely, shoppers who are patient enough to stand in line at Costco to save a few bucks on toilet paper would be furious if they realized they were ponying up hundreds or even thousands of extra dollars for their mutual funds.

Unfortunately, the mutual fund industry long ago mastered the art of stealth fees. Consumer advocates, over the years, have clamored for account statements that pinpoint what each of us pay for the privilege of being fund investors.

The fund industry, however, has routinely squashed the idea. Obviously, if we don't know what we're paying, we lose the motivation to find better deals.

The closest thing to a fee disclosure can be found is each fund's yearly prospectus. In this document, you'll find a chart that projects what the costs would be for a hypothetical investor.

Hardly anybody reads this ponderous handout and even if they did, it only provides an example. I wouldn't be alarmed at Donald Trump's credit card bill because I don't have to pay it. I'm only interested in what my bill is.

If you don't know whether your fund company has shaken you down, make this the day you find out. It isn't hard to do.

What you want to obtain for each of your funds is something called the expense ratio. You can locate this number in the prospectus, or you can call the fund company or the adviser who persuaded you to buy shares. Perhaps the easiest way to get this expense ratio is to visit Type in the name of your fund in its search engine and once it appears on the screen, click on the "Fees & Expenses" link.

This ratio tells you what percentage of your account is being siphoned out for expenses each year. For example, if you have $50,000 in a fund that maintains a 2 percent expense ratio, your tab for the year would be $1,000.

The cost for a $500,000 retirement nest egg that's invested in the same fund would be $10,000. It's these sorts of numbers that will make the time you spend chasing toilet paper discounts look pretty inconsequential.

Lynn O'Shaughnessy

Lynn O'Shaughnessy is the author of Retirement Bible.

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