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Raising FinanceThere are many ways of investing in property, even if you don’t have any money. Lease options and Rent to Rent are two very popular strategies. You can create a lot of cash flow by packaging and sourcing deals for other investors for a fee. However, it doesn’t mean that if you don’t have money, you can’t invest in multi-million pound projects such as developments, commercial conversions or normal BTL properties worth a lot of money.There are people out there who are waiting with their cash to invest in your deals instead of having their money in their bank where they’re unlikely to get much return. Money loses value every single day and after paying taxes, they may just break even or make a loss. That is why they look for new opportunities. Some of those people are cash rich and time poor, meaning they don’t have the time to find deals. These investors are looking for people like you to find and negotiate deals so they can finance it and share a profit with you. You need to start hanging around with these sorts of people; tell them what you do and build a relationship with them at the networking events, exchange business cards and after the event follow up with everyone the next day via email. You can say things like: “Hi Mr Smith, it was a pleasure to meet you at the property networking event yesterday. It would be great to meet up with you to discuss further business opportunities. Please let me know when you’d be free to meet up.” Or you can say things like “There is no free lunch, but there is when I am in town.” It all depends on who you deal with. This is just a simple example. If you are good at writing emails you can develop it, but try to keep it short and to the point. Remember: dress to impress; you can never get a second chance at a first impression. Who you hang around with is who you become and your network is your net worth. If you told us how much five of your friends made annually we could predict your salary.We will name a few places and products where you can raise money for your property investments. Even if you have a lot of money and you start investing, you will eventually run out of money one day. That is why it’s very important to raise finances and use other people’s money instead of your own. All successful people do the same – they don’t use their own money.Joint Venture (JV) This is a very good way of building your property portfolio quickly with minimal risk and no capital required. JV partners could be people who you meet at networking events. Some have a lot of time and will bring you good deals, whereas others are very busy but have a lot of cash to invest. If you are working with private investors they will have business experience that can help you. This will be very beneficial when analysing deals, legal issues, profit and loss etc. It is much easier and quicker to build a property business with partners than by yourself. Before entering in any JV agreement, make sure you do your due diligence on the person you are dealing with and consult with your solicitor. JVing with other people has positives and negatives so you need to analyse it before you enter such an agreement.For a joint venture to work, you need to choose the right partners; each partner needs to bring something different to the partnership. It’s important to have clear documents that outline how the partnership will work so you know who is responsible for what. You need to be honest and open with each other.I (Damian) experienced bad partnerships many times and lost a lot of money in business but it wasn’t their fault – it was mine. You need to take responsibility for yourself. If I had done enough due diligence on the people I was partnering with I would never have gone ahead with the deal. But I am happy that it happened as it was a good lesson and I will never make the same mistake again. It takes time to find good partners and you might be lucky and find a good one in the first place. Remember there is a golden rule in business: trust but verify! I have done many good deals with my current business partners and it would never have happened if I didn’t go to networking events. Shane and I travelled all the way from London to Florida just to network and meet new people who we can do business with. That is called sacrifice; we do whatever it takes. Do today what others don’t, to have a tomorrow that others won’t.You can also JV with your friends and family; you provide the deal and knowledge whilst they bring the money required. Once the work is done, you share the profit 50/50. There are many different ways of structuring JV deals. For example, there might be people who are not interested in monthly income but investing money for capital appreciation. So instead of sharing the profit 50/50, you take the cash flow every month and they take the equity. The amount the house appreciates in value will benefit your JV partner, but make sure you have an exit strategy in place so you don’t have situations where they want to sell the property but you want to keep it.Remember that 50% of the deal financed by a JV partner is better than 100% of nothing.Crowd FundingCrowd funding is getting more and more popular. There are a lot people with a good business plan and models but with limited finances. Raising money from banks is difficult and bridging is expensive. Many investors look for opportunities where they invest their money for a share in a company or project in return. It is very common in this day and age to start big developing projects where there are few investors that fund the project together to build apartments, and once it is sold they share a profit equivalent to the proportion of the money invested. In some crowd funding projects, anyone can invest money and get, for example, a 10% return on their investment. Quite often there are hundreds of people investing in one project. This is an extremely powerful strategy and it’s now even used to raise money for start-up businesses and movies.Credit Cards, Loans and OverdraftsWhen we started our property journey we had no money and a lot of debt. Our favourite source of investment at the time was credit cards and overdrafts as we didn’t know many people who we could raise the money from. Most of our credit cards were maxed out, so we had to increase our credit limits. Our first property investments came from none of our own money! When you have no money you must start thinking outside the box as you have little choice. These tips came from our mentors, they showed us how to do it and what to say when talking to the banks as this is very important. If you tell your bank that you need money to invest in property then you can forget about them agreeing.From being broke, we both achieved financial freedom in just one year of investing in property. It all came from knowledge that we acquired from our mentors, books and creativity, so we managed to crush the myth that you need money in order to make money! If you want to master the property game, you need to have the knowledge to be creative. That is how winning is done. Most of the multi-millionaires and billionaires are self-made; they started from zero or debt, so anything is possible. You just have to believe it, set up a plan on what you want to achieve and how you are going to get there; for your dreams to come true you first have to wake up! You can have anything you want in life, you just have to be hungry and believe that you can have it.Sylvester Stallone (Rocky Balboa) is a great example of a self-made millionaire. He started from humble beginnings – he was evicted from his apartment and was homeless for a while. In March 1975 Stallone saw Muhammad Ali fighting against Chuck Wepner. After that fight, he went home and started writing a script, taking inspiration from both the fight and the autobiography of Rocky Graziano to start writing Rocky Balboa. Stallone attempted to sell his script to multiple studios with the intention of playing the main role in the movie. Although receiving enormous amounts of rejections, which went on for several months, he never gave up. He was finally offered $350,000 just for the rights to the script without him playing in the movie. He refused to sell it unless he could play the main character, so after a substantial budget cut to compromise the producers agreed to have him as a star, and the rest is history. He could have just taken the $350,000 which for him at that time was a lot of money, but if he did he wouldn’t be where he is today. That shows determination. There was a time in his life where he had to sell his dog for $50 because he didn’t have any money to feed him; after his success with the Rocky Balboa script, he bought his dog back for $15,000.Angel InvestorsThere are a lot of places to go where angel investors spend their time. All you need to do is search on the internet for the closest one to your area. Millionaires and billionaires come to these places and look for people with great ideas for a new business where they can invest their money for a share in the company in return. More importantly, not only will they invest, but they will also give you all the support you need, which is priceless. They usually have their own power team that has expert knowledge in marketing, branding and selling. Of course, you must know everything about the business and have a great pitch that will attract the investors to persuade them to invest in your company or project.You need to make sure you know your numbers; know everything about your competition, if there is any, and have a great unique selling proposition (USP). Having a mentor that has already achieved what you want to achieve is precious! I (Damian) have invested and started many companies before property investing. I invested all the money I saved from my part-time jobs and I lost it as well as getting myself into debt. The main reason I failed in both businesses was because I didn’t know what I was doing. I had no guidance or a mentor to tell me how it needs to be done, what needs to be changed and what it is I was doing wrong.When I started property investing, I had a mentor from the beginning and that is why I succeeded and I have done it in a very short space of time. I knew exactly where I was going and I knew that I had the support if I needed it. Every successful person has a mentor; imagine a footballer in the English Premier League or an athlete without a coach. Do you think Usain Bolt, the fastest runner on the earth, would be where he is today without a coach? We have paid a lot of money for mentoring and coaching, but with angel investors you can receive investments and free mentoring for a share in your business.Family and FriendsThere are a lot of people such as friends and family that have money sitting in their bank accounts without getting much return on their savings. Believe it or not, but money goes down in value all the time; inflation kicks in and prices go up. What you could buy for £10 ten years ago you can’t buy anymore. That is why it’s very important to invest in assets that appreciate in value. If you get a good deal, you can ask your friends if they would like to get 10 % return on investment on their money. I am sure they will like the idea as in the bank it’s unlikely they’ll get more than 1%. How you give it back is flexible; once the property is refinanced or pay them interest each month. It all depends on the individual and your agreement. Once they get their money back after the first deal, this will prove you can be trusted and they are likely to lend you money again.Sell LiabilitiesWhat do we really mean by selling liabilities? A liability is something that takes money out of your pocket, e.g. if you have a car that is worth £10,000, it will go down in value every single year plus it will cost you money every single month. Car insurance needs to be paid, road tax, petrol, MOT test, car maintenance and repairs. If you sell the car for £10,000 and buy a property below market value, you can refinance the property after 6 months and buy a new car or you can get a new car on finance as you will have a passive income from the house you bought. Every single month the rental income will pay for your car without you physically working to pay for it, so instead of having just a car, now you have a property plus a car that is paid by the asset you have acquired. What would you prefer?Bridging LoanA bridging loan is a very good method if you need to borrow money for a property that you want to buy very quickly. It only takes a few days for the bridgers to accept your application and lend you the money; in some cases 24-48 hours. If you borrow for the first time and pay back successfully the next one will be much easier and quicker because they know that you are reliable.Bridging loans are mainly used by investors buying houses at auctions where you have to complete the purchase almost immediately. You cannot do the same with a standard mortgage company. Bridging loans have very high interest, from 1-3% per month or more in some cases. You need to know your numbers and have an exit strategy in place as it’s a very risky loan. If you have never taken out a bridging loan, make sure you consult with a financial advisor beforehand or somebody that has experience in bridging so they can make you aware of the potential problems that can arise.Social Media GroupsThere are a lot of property investing groups on social media that you can join for free. You can ask questions, gain free advice and find potential business partners. You can even sell and buy property deals, subject to how active you are in the forums.Before buying anything, make sure you do your due diligence on the person that is offering the deal and on the property they are offering. We had many deals that came our way but when we did our due diligence we found out that many of these properties were on Rightmove and Gumtree, revealing that we were not being offered a discount or, in some cases, they were trying to charge us above market value!Seminars and Networking EventsThis is our favourite way of raising finance, as most of the deals we have done and money we’ve raised came from people we met at seminars and networking events. Some people we know say that we are lucky because we manage to sell a deal or get a deal financed that made us a lot of money. But guess what? If we were sitting at home watching TV, playing PlayStation or going to the pub with friends, we would never have met the sources and our business partners. It’s all down to our hard work and the time we spent building relationships and our network. Your network is your net worth and it’s not who you know but who knows you.You first need to invest some money into the relationship before you start to do business with anyone. We invite potential business partners for dinner, for example. Is food free? No, it isn’t! Is transport free? No, it isn’t! You need to pay for eating quality food, for petrol or a train ticket. People who say you are lucky forget about all the sacrifices, costs and hard work. Business relationships are similar to dating. You shouldn’t ask for sex on the first date; it’s the same in business. You need to meet multiple times and build a relationship with a potential business partner before you do any business together.Private Members ClubThere are many different types of private members’ clubs. If you are a fan of cars, you could look into a Ferrari or Lamborghini private members’ club. You don’t necessarily need to own one to be a member. People who can afford these kinds of cars are definitely the ones with money so it could be a huge benefit to hang around with them and build relationships that could add value to your business in the future.There are also yacht clubs, gentleman’s clubs, luxurious concierge services where you pay a monthly fee of anything between £50-£200. You get access to the best clubs in your city for free where you don’t need to wait in a queue. Impressive restaurants and sold out VIP events from the world of music to theatre, film, sport and art. There are many different private members’ clubs to choose from – it all depends on what you are looking for and what interests you. You can find more information about private members’ clubs online.High End GymsThe gym is a perfect place to network with people. There are reasons for that. First of all, you will see the same people every single day or at least 3-4 times a week because if you want to keep healthy and fit you need to work out on a regular basis. When you meet someone every single day and you make eye contact with them they will remember your face, and eventually you will start talking to each other. You will share weights, benches and equipment together and if they like you, you might even come to the gym with them at the same time and work out together.The main reason that we mentioned high end gyms and not just any gym is because this is where wealthy people go to exercise. Wealthy people won’t go to any local gym as they like luxury and great customer service – everything they need is in one place from nutritional guidance, private medical care, spa treatments to DNA testing to determine what exercise suits them best. They also want to hang around with other people who are successful because who you hang around is who you become.High end gyms have very expensive joining fees, which could be anything from £400-600 and a monthly fee of around £185-240. The most expensive one in London is in Knightsbridge, which costs as much as £2000 to join and £500 per month. There are a lot of gyms to choose from that are also very good and attract successful people and cost much less. David Lloyds or Virgin Active gym will cost you around £70-90 per month. High End gyms cost a lot but sometimes it is money well spent. If you can find someone that could finance your project of £500,000 to £1,000,000 or JV with you, isn’t the £200 per month worth it? Some people spend £3 on a coffee every single day, £3 x 5 days= £15 per week! In one month, that’s a cost of £60. What if you could save this money instead and put it towards the gym membership that will be much more beneficial and healthier than your daily coffee?There are many more places where rich people spend their time. A charity ball is a good place to go as people spend a lot of money there bidding and raising funds to help the less fortunate.There are very cheap and also very expensive ways of raising money. Everyone’s situation is different. You might be able to pay the £200 for the gym membership or you might prefer to go to free seminars or networking events. If you keep working hard and you are out often meeting new people, you will build your network and you will find the people who you are looking for. It might take you slightly longer than the more costly route as it may attract wealthier people, but you will still make it as you might meet someone who knows somebody who has the money and would like to invest it or get a better return than the bank is giving. We had to choose the cheap route as we were in debt so didn’t have the money to join expensive clubs. We are a living example that you can build a big network without spending £200 per month on gym membership. We met most of our business partners and investors at networking events and seminars, but we worked really hard to build those relationships.

With interest rates now at historically low levels and the United States economy growing at a strong pace, many business owners have been considering the purchase of commercial real estate for their business locations. The benefits and drawbacks to commercial real estate ownership vary from business owner to business owner but potential buyers should educate themselves about the obvious and sometimes hidden benefits to the ownership of a commercial property. Below are some of the major benefits to ownership as opposed to leasing a commercial space.Tax DeductionsFor many business owners one of the primary benefits of commercial real estate ownership are the tax deductions that can be taken on the interest portion of the monthly commercial loan payment. These deductions can be substantial and each business owner should consult a qualified tax specialist about their unique situation.Equity AppreciationOn average, commercial real estate properties will appreciate about two to three percent above inflation over the long term. This equity appreciation can result in significant financial gains over a period of decades.A Retirement FundMany small business owners will not receive a pension when they decide to retire. The equity appreciation on commercial property can be significant. An owner can decide either to sell their property at retirement, cashing in on equity appreciation or lease it to another business for a continuous retirement income stream. In fact, in many situations, a business owner may be able to lease out an unused portion of his property, such as a spare office, before retirement for additional income.Added Value To BusinessAs opposed to residential loans, many commercial loans are assumable. This makes the business and real estate much easier for a buyer to acquire and enhances the value of the business tremendously.No Taxes To Pay On Your RentWhen a business leases their real estate they must pay sales tax on the rent paid to the landlord. When you own the real estate there is no tax to pay on the rent. The savings can be significant.Easy Access To FinancingGreat fixed rate loans for terms up to 30 years are now available for owner occupied commercial properties. In fact, in some instances, with strong financials, a business owner may qualify for loan financing up to 100% of the purchase price for his commercial real estate. Business owners should consult an experienced commercial mortgage adviser before making an offer on a commercial property.In addition to the easily tangible benefits outlined above the business owner who purchases a property to house his business location will be able to have the satisfaction that only comes with ownership and he won’t be making his landlord rich.

There are many options for buying a group of securities in one product. The most popular ones are mutual funds, segregated funds and exchange traded funds. What they have in common is that these products are an easy way to buy a group of securities at once instead of buying each security individually. The fund can also proportion the securities so that you the individual investor does not have to. There are two main classifications for what type of fund you can purchase in terms of costs. It is important to know how these costs work so you can avoid paying too much for this convenience. These products differ in terms of how they are administered, access to the products and their costs.Active Versus Passive InvestingBefore getting into which of the products are suitable for you, there are some aspects that need to be considered so that you understand what the variations are among the products.Active investing is when someone (a portfolio manager) picks the stocks that are in the fund and decides how much of each one to hold (the weighting). This portfolio manager would also monitor the portfolio and decide when a security should be sold off, added to or have its weighting decreased. Since there is ongoing research, meetings and analysis that must be done to build and monitor this portfolio, this fund manager would have research analysts and administrative personnel to help run the fund.Passive investing has the same setup as active investing, but rather than someone deciding what securities to buy or how much of each one to buy, the portfolio manager would copy a benchmark. A benchmark is a collection of securities which the fund is compared against to see how well it is doing. Since everything in investing is about how much money you can make and how much risk it takes to make that money, every fund out there is trying to compare to all of the other funds of the same type to see who can make the most money. The basis for the comparisons is the benchmark, which can also become comparing between peers or funds managed the same way. Comparisons are general in done only for returns. The risk aspect of the equation is handled by looking at what type of securities the fund holds or how specialized the fund is.How Do I Know By the Fund Name If it is Active or Passive?The short answer is that you have to get to know how the fund manager operates the fund. Some clues to know more quickly if the fund is active or passive are given next. If they are intentionally trying to pick securities according to some beliefs that they have about the market, this is active management. If the fund description talks about “beating the benchmark” or “manager skill” then it is actively managed. Looking at the return history, if the returns vary versus the index by different amounts each year, then the fund is actively managed. Lastly, the fees may be expensive and have sales loads.If the name of the fund says “Index” or “Index fund” there is a good chance that the fund is passively managed. If the name of the fund says “ETF” or “Exchange Traded Fund” this could be a passive fund, but you need to make sure of this because some ETFs are actually active funds, but they are managed in a certain way. Most of the passively managed ETFs are provided by BMO, iShares, Claymore, Vanguard and Horizons in Canada and Powershares, Vanguard and SPDR (or Standard and Poors) and others if the holdings are from the U.S. Most of the other companies would have actively managed funds only. If the fund description states that the fund is trying to “imitate” the performance of an index or benchmark, then this implies that it is copying the index and this is passively managed. From the return perspective, passively managed funds will be very close to the index that they claim to imitate, but slightly less due to fees each year. The amount that the returns are under the index will be close to identical each year unless there are currency conversions or variances in cost which may come from currency fluctuations or hedging that the fund may do. Passive funds typically do not have sales loads as they are geared toward people who invest for themselves.There are some funds that try to mix active and passive management. These products can be assumed to be actively managed, although their results will be closer to the benchmark than most of the other funds, so this is something to consider if the variation from the index is a factor.Types of CostsWhatever product you buy, there will be a cost associated with buying it, keeping it and selling it. This will be true whether you have an advisor versus doing it yourself, and whichever institution you go to. Even buying your own individual stocks will have trading fees which you must account for. How much you are paying for each product as well as the advice will make a large difference in what return you will receive at the end of the day.There are many types of costs to be aware of when you are deciding which products to invest in. This article will focus on the active funds that make up most of the selection for retail investors.The Management Expense Ratio (MER)This is the largest cost for most funds and represents the cost of managing the fund. “Managing the fund” means running the investment company, researching the investments, advertising, overhead and the cost for the advisor or sales person when it applies. Administrative costs like GST within the fund and accounting for trades and record keeping are also part of the expense. The MER covers all of these costs in an actively managed fund. The MER is given as a percentage, which is the percentage of the assets that the fund manages or invests over a year of time. If you have $100,000 invest in a fund, and the MER is 2% per year, you are paying $2000 per year to keep this fund. The cost is subtracted from the return and what you see in your investment statement is your return net of fees, or after fees. There are exceptions to this rule if you have a high net worth account or a special arrangement with the fund company, but for the typical investor, this would be true. The Management Expense Ratio is the management fee plus the administrative costs. The administrative costs are usually between 0.05% and 0.1% of the assets of the fund. If the information you obtain states a “Management Fee” instead of a “Management Expense Ratio” you would have to add on the administrative costs to get the true fee. Seek out the prospectus and look up fund operating costs to find exactly how much the number is. In some cases, an advisory fee is also added to the management fee and administrative fee which can be substantial. If your advisor does not disclose this, the prospectus is the next best place to find out what the costs are.For American funds, the MER would be called the “Expense Ratio” or “ER” which is the same thing as the Canadian MER, but advisory fees are not included in the ER and would be included in Canada for the MER if the product is actively managed. If the product is passively managed in Canada or the U.S., the same names apply, but no advice would be part of the cost since these products are used by people who invest for themselves and would pay for advice separately if they retain it.MER Will Depend on ClassThere are products that have various classes of the same product, the same way there are different models of the same car or the same cell phone. For investment products, the classes indicate how you came across the product, or what restrictions you have on access to the product. For example, Class A is usually a retail class where anyone can buy the product with any amount of money. There is Class I, which can be obtained through an employer or another institution. An example might be buying this product through your company pension plan. There is a Class O which typically has no fees embedded in the return and is reserved for non-profit institutions of high net worth clients that buy direct from the company. There are also classes that are part of different portfolios that are set up by the issuer, like Class F which would be available depending on who your investment dealer is. There are also classes that vary depending on what type of advisor you have and what relationship they have with the fund company. The best thing to do here is ask what class you are being offered and get material form the issuer on how much it would cost. In some cases, you can get the same product in a different class and pay less for it. Some companies may have “Series” instead of classes or some variation thereof. The key thing to note is that different versions of the same fund would different fees, and the differences can be substantial.Sales LoadsWhenever you see the word “load” on a fund it refers to a sales load. This fee is paid to a sales person for advising you and recommending the product to you for the company. There are “front end loads” which are paid as a percentage of the amount you initially invest. If a front end load is 4% and you invest $100,000, you will pay $4,000 up front just to buy this fund. These funds may have the code “FE” in the fund name on your statement. Note that sales loads are not related to MER fees – they are separate fees. There is also a “back end load” or “Rear end load” which is a percentage charged to you when you sell the fund. These are marked with the code “DSC” or “Deferred Sales Charge”. If a back end load is 5%, and you sell $120,000 worth of this fund, you would pay $6,000 in fees to exit the fund. These funds tend to have a DSC redemption schedule which means the sales load will decrease the longer you stay in the fund. Most companies stop charging the rear end sales load after 6 years of holding the product. Since each company varies, you should obtain the details of this schedule up front and understand how the numbers apply to your holdings. There are also “no load” funds which do not charge sales loads at any time. You may also come across “Low Load Funds” and “Level Load Funds”. Low load is similar to the fees discussed above, but they are discounted or lower than average. The level load idea means that the same percentage of sales load is charged over time.Some companies charge an early redemption fee if you sell their fund within a short period of time. How short the period is will depend on the institution. In some cases, it is 30 days, but it can be 90 days, 6 months, 1 year or some other time period. This fee is designed to discourage quick redemptions or short term trading of the product.The best thing to do to clarify which load you have is to ask up front and have it explained to you. If the information is not forthcoming, it may be time to find another place to invest your money or do the research on your own. Note that sales loads only apply to a fund that is sold through a sales person. You may be able to get the same fund without the sales person in some cases. Passive investing generally does not have sales loads – but the exception would be if an advisor recommends these funds and charges you some type of referral fee. This would be another question to ask if you are being advised to buy a passive fund and are not seeing any direct cost to buying the product.Currency Hedging CostsThis type of fee will occur in funds that trade in non-Canadian currencies and hedge them so that the price you receive would be in Canadian dollars. The cost of transacting the hedge itself is the fee being described here, and it can range from 0.5% to 1% per year. If the fee is not disclosed, assuming 0.5% is the cheapest that it will likely be. If you are investing in emerging market currencies or non-developed market currencies, the hedges are much more expensive to put in place and go higher than 1% per year. This is a cost embedded in the return of the fund, but should be examined to flesh out exactly what you are paying to have this hedged. Both active and passive funds pay the same fee for this type of activity.The alternative would be to keep the securities in their home currencies and whatever changes happen to the foreign exchange rates would be reflected in the price of the product. The fact that currency exchange rates can change is a risk of your investment, but it is not considered a fee like the other fees discussed in this article. This fee does not apply if the fund price is in your home currency. You may have a U.S. dollar account, buy a fund that trades in U.S. dollars and then redeem this fund for U.S. dollars. Until you convert the money on your own to Canadian dollars, there is no currency charge. You would only have a conversion charge to change the final dollar amount to Canadian dollars.Referral Fees or Trailer ChargesThese can sometimes be called Service Fees. This type of charge is paid to a third party who sells the product to you on their behalf. It can be thought of as a referral fee or trailer fee. This fee tends to be captured by the MER, but this should be investigated with the company you are dealing with as this may vary. This type of fee tends to arise with active management as passive management products usually do not have any referrals attached to them.Performance FeeThis fee is based on whether a fund achieves a return over a required benchmark – a reward for good performance. This type of fee is common with hedge funds or exotic types of products, but it is sometimes embedded in funds sold to retail investors. Like with most of the fees, ask questions and do your research because this type of fee will be different for every institution and product. This fee is optional in that it usually will not apply if the return on the fund is negative or positive but not that high, but the question should still be asked to minimize surprises.Fees of Holding One Fund Inside of Another oneIf a fund that you are investing in has other funds within it as part of its holding list, then you will pay the MER fee for the fund you are buying as well as the fund that the fund holds. The best way to check if this is happening is to look at the holdings list. If a fund holds another fund, it will be a large holding so a fact sheet with a top 10 holdings summary should provide good information. The actual numbers for each of these items will differ depending on specifically what the fund is and how it is managed. Some of the other fees like Sales Loads and Referral Fees would not apply to a fund held inside of another fund. If the fee is necessary to operate the fund, like currency hedging, then this would be included. Whether a fund holds stocks or another fund can also impact withholding taxes if the fund is investing outside of Canada – particularly for U.S. products. This topic can get complex, so it will not be discussed here. Some funds will have other funds to get access to illiquid markets, or parts of the world that have hundreds of securities. Buying a fund in these cases would actually save on time and trading costs, so it can be justified depending on the market being invested in.Intangible CostsThe key takeway is that you need to do a cradle to grave analysis of what you have and see the costs from beginning to end of your investment period to get an idea of what is really happening. Ideally, the costs should factor in time spent, effort spent on research, and costs of discipline and assurance which would be available when dealing with an advisor that may not be there when you are doing it yourself.Where to Find These Costs?The most comprehensive place that will contain the most detail regarding fund costs is the prospectus. This can be found be searching for the product name and the word “prospectus”. If you do not know the exact product name, you can search the internet by the company name only, find their web site and then search for the product name there. The fund companies will have these documents with the regulator as well as their own web sites and they will be typically in PDF format which can be read and downloaded from your computer. A simplified prospectus would also have the same data that you would be looking for regarding fees.