Re: OT: Governor Ahnold

Mikey wrote:
"Ray S" <mail@xxxxxxxx> wrote in message news:A5Gpj.42242$G23.23853@xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Mikey wrote:
"Christopher Jahn" <cjahn@xxxxxxxxxxxxxxxxxxx> wrote in message news:Xns9A37C9D5B70xjahn@xxxxxxxxxxxxxxxxx
"Mikey" <zigfried@xxxxxxxxxxx> wrote in
news:9uydnYPBP6wFMD7anZ2dnUVZ_vGinZ2d@xxxxxxxxxxx:

An investment of $1,000 on October 23 1929,
right before the crash, would have resulted in a value of over
one million dollars 40 years later.

And yet, three different branches of my family lost its entire
fortune in that crash. Some of them ended up in abject poverty
because they HAD invested it all.
Investing "it all" in the stock market is not ever a good idea. DIVERSIFY!!

Typically, you've ignored
inflation and the strength of the dollar on the world market;
that "one million dollar value" isn't really one million dollars;
it's actually quite a bit less when you accout for all the
variables.

"Quite a bit less" than one million dollars???
What might that be? $760,000? $500,000? $300,000?
I'LL TAKE IT!!!

$250,000 actually, if you invested for 45 years and earned a return of 4.5 percent.

This will provide you with a yearly income just a tad over what you would get with Soc Sec with the provision that you don't live to long as your money would run out in your early 80's. If you have privatized Medicare as well and you must pay health insurance premiums out of that amount, you will run out a good deal sooner.


4.5%?
The average, year-over-year return of the stock market as a whole (meaning
index funds like the S&P 500 that mimic the overall market) is 11% per
year - that's the AVERAGE, including all the ups and downs that the market
has seen over its lifetime.
Also, if I retire when I am 65 and die when I am 66, where does all my Social Security money go?
The feds keep it.
WIth a private investment my kids can inherit that money.



Your making the assumption that Grandma will be thrilled to ride out the ups and downs of the market. Again, from long experience with many people in 401k's in a company, its clear that many people panic at every down quarter. Money usually flees to the capital preservations side. Very few people throw their money into the Growth side and ignore it.

4.5% is a diversified portfolio spread over a range of risk factors, which is exactly what you should be telling Grandma to do.

I believe you are not familiar with "Survivor Benefits". You also confuse Socal Security with the concept of Retirement Savings. Social Security is an insurance program.
.

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