If you're like me you probably won't pay much attention to brokerage fees when it comes to investing. They just seem part of the deal like hotel or flight taxes.
However, not paying attention to brokerage fees over the long term is a major financial mistake.
Especially as there are now Aussie investing and brokerage apps you can download like Hellostake.com and Goodments.com that allow you to trade for FREE (Hellostake.com) or for as little as $3 or less at Goodments.com.
The latter has a particular focus on ethical investing for millennials, while Stake is big on all investing and runs a great blog on U.S. tech and industrial stocks in particular.
I have downloaded the Stake App from the Apple Store myself for share trading and it's very easy to set-up and go brokerage free.
I should note though that like all overseas brokerage businesses Stake will make a small profit on the FX spread it charges. However, this is more than offset by the free brokerage available in my opinion.
For full disclosure The Motley Fool has also partnered with Stake in the past, although this article is my opinion only.
So you might want to check out either of these businesses especially when you realise how much you can save over time. And I'm not kidding.
How big a difference does free brokerage make?
To illustrate this I am going to shamelessly steal the maths presented in an article by a former colleague David Gow.
The article's millennial author is one of Australia's most famous 'extreme savers' or advocates of the FIRE (financial independence retire early) movements. Despite never earning a high salary, Perth-suburbs-based David saved around $1 million by the time he was 30 just by extreme saving and investing.
The example he uses on brokerage savings is as follows.
If an investor buys a parcel of shares once a month and saves $10 on their brokerage by using the Stake or Goodments app and earns a return of 9%pa on their shares they'll have an extra $1,823 over 10 years.
Might not sound much over 10 years, but if you're young and invest long enough you'll have an extra $63,303 over 45 years.
If the investor traded less and purchased every two months he'd have an extra $94,655. Nearly $100k's difference.
And it's possible to return more than 9% pa on average or save more than $10 a trade to jack the difference way higher.
So paying $19.95 a trade at the Commonwealth Bank of Australia (ASX: CBA) or National Australia Bank Ltd (ASX: NAB) really could cost you a fortune over the long term.
