If you’ve made it this far, you likely have a broad understanding of our offering, what it entails, and why we’re doing it. You may have even read our breakdown of why the current system doesn’t work.

But for those new to Basic Capital: we help amplify your retirement savings by allowing you to “pull forward” contributions today — so you can invest 5x what you normally put in your 401(k), in a structure designed to harness long-term compounding more effectively. 

Since our public launch, one of the most frequent questions we’ve received is about our fee structure. That’s fair. This is a new model, and any time you introduce something unfamiliar (especially in finance), it’s worth unpacking. So let’s break it down.

The Fee Structure

We charge four types of fees: a flat subscription, a management fee, a financing cost with performance participation, and a redemption fee. 

Together, they make it possible for Basic Capital to offer amplified investing with no margin calls. Here’s what each one means:

1. Subscription Fee – $25/mo (for personal IRAs)

This fee applies only to retail IRA users (the self-employed, 1099 contractors, etc.) and is charged annually at the end of the calendar year.

• $0/month for accounts funded solely by bank deposits, up to the $7,000 IRA contribution limit

• $25/month for accounts funded via rollovers from existing 401(k)s or IRAs (no funding cap)

If you’re part of a workplace 401(k) powered by Basic Capital, this is not your fee. Employers pay a separate, lower fee on your behalf. (Typically, it is $5 per month.)

Think of this as the infrastructure cost: it keeps the platform secure, compliant, and operational. Like any premium credit card or streaming service, it’s a flat price for access to the system.

The annual fee is collected from your linked checking account — not from your retirement balance — so we can keep your investment fully compounding.

2. Management Fee – 0.5% of Assets

This is charged directly from your investment account, regardless of short-term market performance. It’s how we manage your portfolio, just like any traditional investment platform.

It’s in line with (or sometimes lower than) the fees charged by many advisory or robo-advisor products.  

3. Financing Cost – 6.26%

Financing is at the heart of the model. We provide 4x leverage on your retirement contributions. But unlike margin loans, Basic Capital’s leverage:

• has no margin calls

• is structured to be held for years

• is secured by long-duration investment allocations

We charge 6.26% annually on the capital we provide.

4. Redemption Fee – 5% of Gains (at maturity)

This is a one-time fee applied when your account matures and you redeem your investment. It’s equal to 5% of your gains and is taken at the end — not along the way.

This ensures that our incentives are aligned with yours.

The Management Fee and Financing Costs Are Paid Directly From Your Investment Gains

They never come out of your paycheck, your bank account, or your take-home income.

We often compare our financing to a mortgage: it’s long-term, fixed-cost, and doesn’t come with margin calls. But we’d be the first to admit that the metaphor isn’t perfect, and there’s an important reason why. 

Homeownership doesn’t come with a subscription fee or a performance fee. Ours does. That’s because we’re not just a lender. We’re also your investment partner.

How the Math Works Over Time

We’ve heard from thoughtful investors who’ve done the math and raised valid questions. To paraphrase:
 

“If I contribute $10K and get $50K invested, but only earn 8%, I barely make anything after fees. Doesn’t that kill the benefit?”

We get it. At first glance, the numbers can look tight. But here’s what’s often missing from that surface-level math. . .

You’re Not Just Leveraging Stocks

Basic portfolios aren’t 100% equity. Our default mix is:

• 90% credit assets (historically yielding ~8.5% based on distributions)

• 10% SPY (broad market exposure)

That means:

• You may earn positive carry (~2.25%) even before factoring in stock performance

• If the market returns around 8%, the equity portion could add roughly 0.8% to your overall return.

In past market conditions, the bond portion has generally earned enough to cover the cost of borrowing, so your stock investments can go toward building gains—not just making up ground.

That has translated, in illustrative scenarios, to a total return of around 14% on original capital—with significantly less equity risk.

Hold Through the Cycles

Because there are no margin calls, you’re never forced to sell at a loss. That’s a key advantage of Basic Capital’s structure. It’s built for long-term investing, where steady contributions and time in the market matter more than short-term fluctuations.

Retirement accounts are naturally illiquid and horizon-based. Basic Capital fits that mindset: leverage with no forced liquidation, allowing you to ride out the cycles. 

The most important thing you can do is stay in, keep contributing, and let time do the heavy lifting. That’s when this model really starts to work.

It’s Not the Cheapest Model, and That’s Intentional

We know the fees are meaningful. In fact, if your goal is to minimize costs above all else, this might not be the right fit.

But for users looking to amplify their savings and make long-term investing more productive, our model opens access to institutional-style leverage and portfolio construction. Again, this is something that’s traditionally been out of reach for everyday workers.

The difference isn’t always visible in Year One. But compounded over time, the added exposure and structured carry have a meaningful impact on long-term outcomes.

Let us know what else you'd like us to explain. Feel free to reach out with any questions.