Fees Make a Difference

Fees Make a Difference

I was so excited this morning after reading an article in the business section of the Sacramento Bee.  It was describing how Wal-Mart is having a positive impact on the environmental practices of companies it does business with, particularly in China.  Apparently, if you want to partner with Wal-Mart, you’re going to have to be eco-friendly.  Nice.

I was excited because Nathan owns a share of Wal-Mart and when a company does good things, it usually ends up being reflected in the stock price.  Eventually.  Besides, being eco-friendly really is a good thing for the planet.

Nathan chose to invest in Wal-Mart for this very reason.  He liked their focus on socially conscious practices.

I handed Nathan the article to read.  I deliberately don’t tell my kids what the article is about because reading the newspaper, especially the business section, is a skill.  Heck, sometimes I have to read an article several times before I get the gist.

But Nathan got this one right away.  “I knew it,”  he said.  “They’re doing good stuff for the environment.”

And then he looked a little sad.  “Let me see what it’s at now,” he said as he left his Facebook page to check the latest share price.

“It’s at $54.  I’ve got a ways to go.  I bought one share at $50 plus the transaction fee of $12.95.  So it’s going to have to go up to $63 before I break even.”

Okay, these are the times when I wonder what kind of guidance I gave him when he wanted to buy in.  I’m very aware of the fees and that in making a purchase, they need to be taken into consideration.  Especially if only a few, or in this case, one share is being bought.

Since I’m the one who sits with the kids at the computer when we make our purchases, I can only wonder what planet I was on to allow him to purchase one share which, in effect, plummeted as soon as the purchase was complete.  I felt really, really bad.  Some guidance I was.

But, it was a good lesson.  Although the fees have since gone down to $7.95, it’s still an important factor in making purchases.  A factor that neither one of us is going to forget the next time we decide to own a little piece of a company.

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