http://www.kirbyonfinance.com/2006/01/28/re-gifted-advantages-of-low-cost-mutual-funds/ Tue, 06 Jan 2009 06:24:29 +0000 http://wordpress.org/?v=2.6.2 http://www.kirbyonfinance.com/2006/01/28/re-gifted-advantages-of-low-cost-mutual-funds/#comment-32 Loi Tran Mon, 30 Jan 2006 05:57:40 +0000 http://www.kirbyonfinance.com/2006/01/re-gifted-advantages-of-low-cost-mutual-funds/#comment-32 I like doing future calculations also, but it's pretty difficult for people to stay the course. In real life, people are always tempted to take money out of their retirement investments to buy cars, houses, or even useless stuff. I also like to keep expected returns at a conservative number. I like doing future calculations also, but it’s pretty difficult for people to stay the course. In real life, people are always tempted to take money out of their retirement investments to buy cars, houses, or even useless stuff. I also like to keep expected returns at a conservative number.

]]> http://www.kirbyonfinance.com/2006/01/28/re-gifted-advantages-of-low-cost-mutual-funds/#comment-30 No BS Finance » More Using Excel Mon, 30 Jan 2006 01:56:56 +0000 http://www.kirbyonfinance.com/2006/01/re-gifted-advantages-of-low-cost-mutual-funds/#comment-30 [...] I’ve attached a spreadsheet answering the “advanced” example from yesterday. In trhe meantime, I also came across a post over at Kirby on Finance that fits nicely into the topic at hand. [...] [...] I’ve attached a spreadsheet answering the “advanced” example from yesterday. In trhe meantime, I also came across a post over at Kirby on Finance that fits nicely into the topic at hand. [...]

]]> http://www.kirbyonfinance.com/2006/01/28/re-gifted-advantages-of-low-cost-mutual-funds/#comment-28 Bill Sun, 29 Jan 2006 16:26:00 +0000 http://www.kirbyonfinance.com/2006/01/re-gifted-advantages-of-low-cost-mutual-funds/#comment-28 Howard's pronouncement is right in general, but a hair misleading on the details. I'll try to keep it brief here in your comments. Assuming a $3,000 addition to the funds are made each year, it will take an 11% return to make $1.7 million in 40 years - and that 10.5% return is <strong>after</strong> fees. Change the assumption, so our hypothetical person gets a 4% raise each year and continues contributing 10%, the total raises to $2.5 million. Not too shabby. But I would take 11% with a huge grain of salt. Perhaps I'm too conservative, but my personal projections assume a max return of 8%. Make that change and our totals are $840,000 (no raise) and just under $1.4 million (with raise). Hardly chicken feed, but it'salways worth looking into the figures. I'll post this with an Excel file shortly on my site. It is important to remember though that he is absolutley right with the general principles - save early and in a vehicle with low fees, <i>ceteris paribus</i>. Howard’s pronouncement is right in general, but a hair misleading on the details. I’ll try to keep it brief here in your comments.
Assuming a $3,000 addition to the funds are made each year, it will take an 11% return to make $1.7 million in 40 years - and that 10.5% return is after fees.
Change the assumption, so our hypothetical person gets a 4% raise each year and continues contributing 10%, the total raises to $2.5 million. Not too shabby.
But I would take 11% with a huge grain of salt. Perhaps I’m too conservative, but my personal projections assume a max return of 8%. Make that change and our totals are $840,000 (no raise) and just under $1.4 million (with raise).
Hardly chicken feed, but it’salways worth looking into the figures. I’ll post this with an Excel file shortly on my site.
It is important to remember though that he is absolutley right with the general principles - save early and in a vehicle with low fees, ceteris paribus.

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