Fun is usually never in the same sentence as mutual fund. Trust me - making steady money on a yearly basis doesn’t light up a room at a party. Mutual funds are, for most people, the best way to invest money. Whether you’re a young risky investor or a conservative “old timer”, mutual funds are a pretty safe retirement vehicle. You must stash away enough money for a mutual fund to grow over time by either depositing a yearly lump sum or dollar cost averaging monthly. I know everyone tells you to start as early as possible, which is totally true, but there are many other factors you must think about before you select your fund.

Are you aware of all the fees that come along with purchasing a mutual fund? This is a critical area that can either make or break your return. If you were to have an 18% yearly increase in your portfolio, and all your fees total 4.5% and inflation is 2.3% your total return is lowered to 11.2%. Here’s a quick look at some of the fees you will encounter in the world of mutual funds.

Sales Charge (Load): This is a fee charged to compensate brokers the fund uses to sell its shares. There are two types of loads, front-end and back-end.

12b-1 Fee: A fee assessed to shareholders for some of a fund’s promotional (marketing and distribution) expenses.

Account Fee: A fee that some mutual fund companies charge to help maintain shareholder accounts.

Exchange Fee: A fee charged by some mutual fund companies when a shareholder transfers from one fund to another within the same family of funds.

Management Fee: A fee that is paid from fund assets to the investment adviser for management of the fund.

Purchase Fee: A fee charged when shares of a fund are purchased. This is not the same as front-end sales load, because the fee goes to the fund, not the broker.

Redemption Fee: A fee charged when a shareholder sells shares in a short period of time. The time limit varies among funds. Some funds charge a percentage, and some charge a flat dollar amount. The SEC generally limits this fee.