One of the most overlooked ways to build wealth is by monitoring retirement account fees. More than 90% of Americans don’t know what they pay in 401(k) fees. Expense ratios are recurring charges based on the amount you invest and the annual returns, and they can have a compounding effect over time.

Take two popular investment options: VFAX, an S&P 500 index fund, has an expense ratio of 0.04%, while GFACX, a growth mutual fund, charges 1.36%. Investing $1,000 per month for 30 years in VFAX could grow to $3.56 million with just $29,000 in fees. The same investment in GFACX could result in $2.7 million with $900,000 lost to fees. Over 40 years, the difference grows even more—$11 million for VFAX vs. $8 million for GFACX. That’s a $3 million gap just from higher fees.

Check your 401(k) and IRA expense ratios and ensure any higher fees are justified by significantly better performance.

2. Cut Back on Major Expenses

Housing and car payments are the biggest expenses for most Americans. The median monthly housing cost is around $225 (not including taxes or insurance), and the average car payment has soared to $742 per month.

Downsizing your home or opting for a more modest vehicle can save hundreds—or even thousands—each month. That money can be redirected to investments or an emergency fund. Making short-term sacrifices today can lead to long-term financial freedom.

3. Ask for a Raise and Invest It

Earning more and saving more go hand in hand. Negotiating a $5,000 raise and investing it at a 10% return annually could add over $1 million to your net worth in 30 years. If you have 40 years to invest, that same raise could grow to $2.4 million.

The key? Don’t increase your lifestyle to match your income. Invest your raise instead of spending it on luxury items.

4. Create a Simple Financial System

Use Google Sheets or budgeting apps to track your monthly income and spending. Stick to the 75-15-10 rule:

• Spend no more than 75% of your income
• Invest at least 15%
• Save 10% for emergencies and big-ticket purchases

Savings are for security; investments are for growth. Even small improvements in financial organization can lead to big gains over time.

5. Take Risks on Yourself

Successful people take calculated risks, whether that means starting a business, going back to school, or learning a new skill. Ric Edelman encourages investing in personal growth and embracing discomfort as a sign of progress.

Start small: read a book, take an online course, or buy a $100 course on a skill you’ve always wanted to learn. Taking action now builds confidence and reduces long-term regret.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

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