Investment Calculator

About

Investment

Contributions

Fees

About This Calculator

Project Overview

This investment calculator helps you compare the long-term impact of different financial advisor fee structures on your investment portfolio. It calculates how your investments grow over time under three scenarios: no advisor fees, a fixed annual fee, and a tiered percentage-based fee. The tool also determines the optimal advisor path by selecting the best fee option each year to maximize your returns.

How Calculations Work

Compound Interest

Your investments grow based on the return rate and compounding frequency you specify. With annual compounding, interest is calculated once per year. With monthly compounding, interest is calculated 12 times per year, resulting in slightly higher returns due to interest-on-interest.

Contributions

Regular contributions are added based on your selected frequency (weekly, bi-weekly, semi-monthly, monthly, or yearly). The timing setting determines whether contributions are added at the beginning of each period (earning returns for that period) or at the end (not earning returns until the next period).

Fee Deduction

Advisor fees are deducted at the end of each year. For the fixed fee scenario, the same dollar amount is deducted annually. For the tiered fee scenario, the fee is calculated as a percentage of your portfolio value, with the percentage determined by which tier your balance falls into.

Table Column Explanations

Year The year number in your investment timeline (1 through your specified duration).
No Advisor Fees Portfolio value if you pay no advisor fees at all. This serves as a baseline for comparison.
Fixed Advisor Fee Portfolio value after paying a fixed dollar amount each year, regardless of portfolio size.
Tiered Advisor Fee Portfolio value after paying a percentage-based fee that varies based on your portfolio size according to the fee schedule tiers.
Fixed Fee/Yr The fixed dollar amount deducted each year (same every year).
Tiered Fee/Yr The calculated tiered fee for that year based on portfolio value and applicable tier rate.
Optimal Advisor Path Portfolio value if you switch between fixed and tiered advisors each year, always choosing whichever results in a higher balance.
Advisor Used Which advisor (Fixed or Tiered) was optimal for that specific year.
Total Fees Cumulative fees paid from year 1 through the current year when following the optimal advisor path.

Tips

  • Fixed fees tend to be more beneficial as your portfolio grows larger, since the fee stays constant while percentage-based fees increase.
  • Tiered fees often work better for smaller portfolios where the percentage amounts to less than the fixed fee.
  • The Optimal Advisor Path shows the theoretical maximum if you could switch advisors each year with no penalties or restrictions.
  • Consider transaction costs, tax implications, and advisor switching restrictions when interpreting results in real-world scenarios.