Two people can invest the same amount, for the same period, at the same assumed gross return and finish with different balances because of recurring costs. Our illustration isolates that effect; it does not forecast a real portfolio.
Watch the original Finance Hub video ↗Keep the inputs identical
The model contributes €500 at the end of each month for 25 years, starting from zero. It assumes constant 6% gross annual growth and subtracts the annual cost rate before dividing the resulting rate by 12. There are 300 contributions, totalling €150,000.
What the calculation produces
At 0.2% annual costs, the simplified ending value is €336,026. At 0.8%, it is €306,808. The difference is €29,217, rounded to €29,000 in the video. The formula is €500 × ((1 + r)^300 − 1) ÷ r, where r is the model's monthly net rate.
What the model leaves out
Actual returns fluctuate. Products deduct fees in different ways; contribution timing, tax, inflation and trading charges change the result. The extra cost also reduces the capital available for subsequent growth, so the balance difference is not simply a bill paid to a provider.
Use the idea without chasing one percentage
Review your actual product and account charges in euros. Compare alternatives with equivalent exposure and consider tax, liquidity and access before making any change.
Sources and method
The balances are independently recalculated educational illustrations, using the formula above. ESMA provides context on fund and distribution costs, not a forecast of these balances.