Hold onto your hard-earned cash
The secret to financial success lies largely in stopping every Tom, Dick and Harry from dipping their hands into your wallet.
It's as much about holding onto what you already have, as it is about earning more.
Unfortunately, you'll find people and companies trying to part you from your cash at every turn.
Without looking it up - how much are the fees you pay to your KiwiSaver provider?
If you're shrugging your shoulders, you're not alone. Nine out of 10 people probably wouldn't have a clue.
If you only have a few thousand bucks stashed in KiwiSaver so far, which most people do, the fees hardly seems worth worrying about.
But that's the wrong attitude. Over the course of a working life, the money men will skim literally tens of thousands off the top of your account.
There's no theft involved because you've signed on the dotted line and agreed to it.
If you're in a really expensive fund, you'll pay more than $200,000 in fees over 40 years.
Yes, that's enough to put a chunky deposit on a house, or buy a brand new sports car. Now are you paying attention?
If you type "Sorted Fund Finder" into Google, you'll find a great starting point for learning about KiwiSaver fees.
The website lets you sort funds from the lowest fees to the highest. A quick scan reveals the cheapest on the market is Kiwibank's Cash fund, at 0.59 per cent per year.
A little number-crunching shows someone earning the average salary will pay $20,660 in fees between age 25 and age 65.
That's a huge number, and remember, this is the very cheapest of almost 200 options.
The most expensive is the Aon Milford growth fund, which might cost the same person a mind-blowing $214,690.
However, those funds are completely different so its not comparing apples with apples.
Funds are usually categorised by risk, from the simplest cash fund with money in the bank, to the aggressive share-trading funds.
As a general rule, the riskier the fund (and the higher the potential returns), the heftier the fees.
Many people are still in the cheaper, conservative funds where they were automatically placed.
A look through the fund-finder shows the lowest fee in the category is ASB's default fund, at 0.76 per cent.
The highest is the Lifestages "capital stable" portfolio, at 1.89 per cent.
The contrast between the two similar-risk funds is still immense.
You'll pay $23,300 in fees to ASB over the course of 40 years, and $76,560 to Lifestages - a difference of more than $50,000.
What you have to ask is whether that fund is going to add more than $50,000 worth of value.
Fees certainly aren't the only factor to look for when choosing a fund, but they're right up there.
Investment returns can vary hugely from year to year, and a superstar manager one year could be a dud the next.
Through good times and bad, fees are constantly chipping away at your nest egg. So it's crucial to do your homework, and vote with your feet if need be.
- Sunday News