Additionally, the larger the expense ratio of an investment, the larger the difference. A 0.1% expense ratio is fairly low, depending on the asset class of the investment, but what if the expense ratio is 0.5%? After one year of investing that same $10,000, the difference is $50. After 20 years, it has grown to almost $2,900, and after 50 years to almost $38,800.
The bottom line is that cost should be a main consideration when selecting investment options for a particular asset class. If investing in an US equity index fund, the cost can be expected to be as low as 0.03%. However, if investing in an emerging markets bond fund, the expense ratio may not fall below 0.6% and could be as high as 1.9%. Consider the cost when investing to maximize your money.