This article has been revised to include information on load breakpoints for American Funds' mutual fund offerings. Thanks to the many Foolish readers who wrote to encourage this addition.

I'll just come right out and say it: I don't know anything about money.

I mean, I know that it's generally greenish and papery and comes in various denominations. Or, alternately, round and shiny and very dangerous if dropped from tall buildings. I know enough to always pay my credit card balance in full every month, and I'm one of those strange people who keeps a monthly budget in convenient spreadsheet form to make sure I live within my means. I've got a tiny handful of shares in Xerox (NYSE:XRX) and Energy East (NYSE:EAS), gifts from my late great-grandmother, which I occasionally remember I own. And thanks to the initial encouragement of my far wiser dad, I've been making regular deposit-and-forget payments to a mutual fund in a Roth IRA since I was 18.

Beyond that? Not so much with the financial wizardry. I didn't even notice when, back around the time I graduated college, the mutual fund in which I'd been investing took a serious nosedive, wiping out a good portion of the meager amount I'd been able to invest to date. Again, it took my dad's advice to get me to pull my money out of that poor, sad fund and roll it into a much better-performing one he'd found. Even then, it took me years before I bothered to even look at that fund's long-term performance and make sure it was making a decent return on my investment. (It was. Phew.)

That's part of why I wanted to work for The Motley Fool in the first place. I figured that the best and most painless way to beef up my woeful financial knowledge was to surround myself with people who knew way more than I did and see if any of that know-how rubbed off. (Not literally, of course. I'm pretty sure there are laws against that.)

Mere weeks after I joined the ranks of Fooldom, I met mutual fund mastermind, Motley Fool Champion Funds editor, and all-around nice guy Shannon Zimmerman at the Fool's annual meeting. Finally, I thought, someone who can enlighten me about the arcane workings of my mutual fund, or as I'd previously been thinking of it, the black hole into which I placed a chunk of my cash every month. So I asked Shannon his opinion of my current fund, American Funds' Growth Fund of America (FUND:AGTHX).

"It's pretty good," he said after a moment's thought, "but it's a load shop, and I tend to avoid those."

I nodded, and smiled, and hoped that I looked very much like someone who actually knew what "load shop" meant.

The first chance I got, I grabbed a copy of Champion Funds and started reading. That's when I learned that, besides the obvious measure of a fund's returns, there are three important criteria for a smart investment:

  • Tenure of management. In general, the longer a fund's managers have been at the helm, the better its results. Funds whose managers cycle in and out frequently, often leaving inexperienced newbies behind the wheel, just aren't as appealing as those captained by savvy veterans. (If the starship Enterprise were commanded by Wesley Crusher instead of Jean-Luc Picard, would it be half as impressive?) Good news for me here: Though two of my fund's managers came on board in 1998, three have been around since 1986, and two more have logged more than a decade with the fund.
  • Expense ratio. Even I knew going in that each mutual fund subtracts a sliver of its fundholders' accumulated wealth each year to compensate its managers for their stock-picking labors. Hey, it's only fair. According to Shannon, the average expense ratio for mutual funds is 1.44%. My fund came in at a svelte 0.7%, which was my cue to do the Barely Knowledgeable Investor's Victory Dance of Financial Glee. (It involves a lot of hip-shaking and a general absence of dignity.)
  • Front- or back-end load. And here's where I fell on my face. In addition to the expense ratio, some funds take a cut out of each amount of money you put into a fund (a front-end load) or withdraw from a fund (a back-end load). While mine had no back-end load, it exacted a hefty 5.75% from any money I put into the fund. Ouch.

That doesn't sound so bad, right? What's 5.75% between me and a high-powered team of investment wizards? Alas, that little chunk can really add up over time, as I discovered via a quick Web search for a compound interest calculator.

I know that I've already got about $10,000 in my IRA; that I'm adding $4,000 a year, the most allowed by current laws; and that I plan to keep investing for the next 44 years, until I hit age 70. According to American Funds, my fund has a 15.53% lifetime rate of return -- but when that 5.75% load is factored in, the return rate drops to 15.31%

When I plug the no-load numbers into my compound interest calculator, then add my estimated no-load contributions, I get a total of $22,772,575.40. (Woohoo! Platinum-plated Lamborghinis for the grandkids!) But with that 5.75% taken off the front end, my eventual lump sum gets knocked down to $21,133,026.53. That's $1,639,548.87 I'll be denied in my golden years. Sorry, hypothetical grandkids -- no trip to Lunar Disneyland for you.

Those are just quick-and-dirty calculations, of course. They don't factor in inflation, taxes, fluctuating stock prices, reinvested dividends, upcoming increases in maximum IRA contributions, or the limits that'll be placed on my ability to contribute to my Roth IRA should my income, by some improbable chance, ever hit the magic $95,000-a-year mark.

In all fairness, my calculations also leave out the breakpoints that American Funds offers on the loads for its mutual funds. The load I pay will start declining when I reach $25,000 in assets, and as soon as my fund has racked up $1 million in assets, my load drops to zero. (Perhaps my hypothetical grandkids will get to ride the Moon Matterhorn, after all.) I'm fortunate to invest with a company that pares back its load to reward long-term investors, but folks who plunk their money into other load funds won't always be so lucky. And even with those breakpoints, investors like me who start from scratch and invest a little every month will still see load fees nibble away a significant piece of their retirement savings' crucial foundation.

I can't ignore my fund's experienced managers, paltry expense ratio, and market-beating average annual return. For those reasons, I'll be sticking with my current fund for now. But it might be time for me to start shopping around for a replacement, one that'll offer me equally great returns without taking a cut off the front end. (The sort of no-load fund, coincidentally, that Shannon spotlights each month in Champion Funds. Convenient, no?)

I won't claim that I'm now any kind of financial supergenius. I'm not ready to match wits with the likes of Alan Greenspan in anything more challenging than a game of Uno -- and even there, I suspect Greenspan's a devil with those Draw Four cards. And even if I had the extra cash to start playing the stock market -- not quite an option at the moment, unless I sacrifice such frivolous luxuries as "eating regularly" -- there are only a handful of companies, like Apple (NASDAQ:AAPL), Southwest Airlines (NYSE:LUV), or Motley Fool Stock Advisor pick Pixar (NASDAQ:PIXR), that I know enough about to feel confident investing in. For now, it's mutual funds or nothing for yours truly, which makes me especially glad to have Champion Funds around to clue me in.

A subscription to Motley Fool Champion Funds gets you 12 issues of Shannon's beginner-friendly insight into the world of mutual funds, plus full access to archived issues and a Foolish community full of empowered investors just like you. If you happen to be doubtful, cautious, or -- like me -- just plain stingy, you can give Champion Funds a try absolutely free for 30 days, no strings attached. Imbeciles of the world, unite! You have nothing to lose but your confusion.

Fool online editor Nathan Alderman knows enough to avoid sticking quarters up his nose. Beyond that, it's anyone's guess. You can view the investments he's more or less sure he owns here. The Fool has a disclosure policy.