Are Upfront Fees Worth It?

Michael has some money he wants to put into the market. He's found some funds that will work well for him, but they have upfront fees. Are the fees worth it?

QUESTION: Michael in Memphis has some money he wants to put into the market, but he doesn’t want to do it all at once. He’s found some funds that will work well for him, but they have upfront fees. Are the fees worth it? Dave offers some suggestions.

ANSWER: That’s the thing about no-load funds. Sometimes, a no- load fund is cheaper, and sometimes, by the time you finish paying all their odds and ends fees, you find out it really was loaded. It was just loaded differently. I’m guessing, though, that you could put a monthly draft automatically drafting out of your checking account on that no-load fund without the purchase fee. I think you could probably just start monthly and not have much. They might charge you $75 one time for setting up the account. I’ve got several loaded funds and several no-load funds as well, and I don’t have any of them that won’t do a monthly. I’m not paying $75 a pop. No chance I’m doing that.