The data on fund fees are from Bogle's Common Sense. The best way to appreciate the impact of fees is to look at them over long timeframes. As Bogle observes, assuming 5 percent annual appreciation over 10 years, a 0.2 percent annual fee (very low) will consume about 3 percent of the initial investment: about $300 of every $10,000 invested. A 1.5 percent fee, meanwhile (the mutual-fund industry average), will eat about 18 percent of the initial investment: a startling $1,800 of every $10,000 invested. The highest cost funds (2.2 percent) will take nearly 26 percent of the initial investment: $2,600 of every $10,000. In most cases, moreover, even the highest-cost funds underperform passive market indices, so you won't necessarily get better returns by paying more (Bogle's cost estimates in Common Sense are slightly higher than these figures: I think he calculates the 5 percent annual appreciation without deducting the annual fees first, but I can't duplicate his results; I have deducted the fees before factoring in the following year's appreciation).