Investment Planning Presented By Laurence T. Hanslits, CFP ® The H Group, Inc. 500 Liberty Street...
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Transcript of Investment Planning Presented By Laurence T. Hanslits, CFP ® The H Group, Inc. 500 Liberty Street...
Investment Planning
Presented By
Laurence T. Hanslits, CFP®
The H Group, Inc.500 Liberty Street S.E.
Suite 310Salem, OR 97301
(503) 371-3333
Investment PlanningCommon Questions/Issues
• How long will my money be invested?
• How much fluctuation can I stand?
• How much can I spend and when?
Investment Planning
Planning for varying returns
Eight Percent Growth applied to $1,000,000Eight Percent Growth applied to $1,000,000Years
0 8.0% 1,000,000$ 16.0% 1,000,000$ 1.3% 1,000,000$ 1 8.0% 1,080,000 15.0% 1,160,000 1.5% 1,012,663 2 8.0% 1,166,400 14.0% 1,334,000 2.0% 1,027,853 3 8.0% 1,259,712 13.0% 1,520,760 3.0% 1,048,410 4 8.0% 1,360,489 12.0% 1,718,459 4.0% 1,079,863 5 8.0% 1,469,328 11.0% 1,924,674 5.0% 1,123,057 6 8.0% 1,586,874 10.0% 2,136,388 6.0% 1,179,210 7 8.0% 1,713,824 9.0% 2,350,027 7.0% 1,249,963 8 8.0% 1,850,930 8.0% 2,561,529 8.0% 1,337,460 9 8.0% 1,999,005 8.0% 2,766,452 8.0% 1,444,457
10 8.0% 2,158,925 8.0% 2,987,768 8.0% 1,560,013 11 8.0% 2,331,639 8.0% 3,226,789 8.0% 1,684,814 12 8.0% 2,518,170 8.0% 3,484,932 8.0% 1,819,599 13 8.0% 2,719,624 8.0% 3,763,727 8.0% 1,965,167 14 8.0% 2,937,194 8.0% 4,064,825 8.0% 2,122,381 15 8.0% 3,172,169 8.0% 4,390,011 8.0% 2,292,171 16 8.0% 3,425,943 8.0% 4,741,212 8.0% 2,475,545 17 8.0% 3,700,018 8.0% 5,120,509 8.0% 2,673,589 18 8.0% 3,996,019 8.0% 5,530,149 8.0% 2,887,476 19 8.0% 4,315,701 7.5% 5,972,561 8.0% 3,118,474 20 8.0% 4,660,957 7.0% 6,420,503 8.0% 3,367,952 21 8.0% 5,033,834 6.5% 6,869,939 8.0% 3,637,388 22 8.0% 5,436,540 6.0% 7,316,485 9.0% 3,928,379 23 8.0% 5,871,464 5.5% 7,755,474 10.0% 4,281,933 24 8.0% 6,341,181 5.0% 8,182,025 11.0% 4,710,126 25 8.0% 6,848,475 4.5% 8,591,126 12.0% 5,228,240 26 8.0% 7,396,353 4.0% 8,977,727 13.0% 5,855,629 27 8.0% 7,988,061 3.5% 9,336,836 14.0% 6,616,861 28 8.0% 8,627,106 3.0% 9,663,625 15.0% 7,543,221 29 8.0% 9,317,275 1.1% 9,953,534 16.0% 8,674,704 30 10,062,657$ 10,062,657$ 10,062,657$
Average 8.0% 8.0% 8.0%
8%Low then High
8%Straight
8%High then Low
8% Growth8% Growth
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Eight Percent Growth applied to $1,000,000Eight Percent Growth applied to $1,000,000with $80,000 Annual Distribution
Years0 8.0% 1,000,000$ 16.0% 1,000,000$ 1.3% 1,000,000$ 1 8.0% 1,000,000 15.0% 1,080,000 1.5% 932,663 2 8.0% 1,000,000 14.0% 1,162,000 2.0% 866,653 3 8.0% 1,000,000 13.0% 1,244,680 3.0% 803,986 4 8.0% 1,000,000 12.0% 1,326,488 4.0% 748,106 5 8.0% 1,000,000 11.0% 1,405,667 5.0% 698,030 6 8.0% 1,000,000 10.0% 1,480,290 6.0% 652,932 7 8.0% 1,000,000 9.0% 1,548,319 7.0% 612,108 8 8.0% 1,000,000 8.0% 1,607,668 8.0% 574,955 9 8.0% 1,000,000 8.0% 1,656,282 8.0% 540,951
10 8.0% 1,000,000 8.0% 1,708,784 8.0% 504,228 11 8.0% 1,000,000 8.0% 1,765,487 8.0% 464,566 12 8.0% 1,000,000 8.0% 1,826,726 8.0% 421,731 13 8.0% 1,000,000 8.0% 1,892,864 8.0% 375,469 14 8.0% 1,000,000 8.0% 1,964,293 8.0% 325,507 15 8.0% 1,000,000 8.0% 2,041,436 8.0% 271,548 16 8.0% 1,000,000 8.0% 2,124,751 8.0% 213,271 17 8.0% 1,000,000 8.0% 2,214,731 8.0% 150,333 18 8.0% 1,000,000 8.0% 2,311,910 8.0% 82,360 19 8.0% 1,000,000 7.5% 2,416,863 8.0% 8,949 20 8.0% 1,000,000 7.0% 2,518,127 8.0% - 21 8.0% 1,000,000 6.5% 2,614,396 8.0% - 22 8.0% 1,000,000 6.0% 2,704,332 9.0% - 23 8.0% 1,000,000 5.5% 2,786,592 10.0% - 24 8.0% 1,000,000 5.0% 2,859,855 11.0% - 25 8.0% 1,000,000 4.5% 2,922,847 12.0% - 26 8.0% 1,000,000 4.0% 2,974,376 13.0% - 27 8.0% 1,000,000 3.5% 3,013,351 14.0% - 28 8.0% 1,000,000 3.0% 3,038,818 15.0% - 29 8.0% 1,000,000 1.1% 3,049,982 16.0% - 30 1,000,000$ 3,003,420$ -
Average 8.0% 8.0% 8.0%
8% 8%8%Straight High then Low Low then High
8% Growth with $80,000 Annual Distribution8% Growth with $80,000 Annual Distribution
$(500,000)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Horsetail Chart of Random Series of Returns Horsetail Chart of Random Series of Returns Based on 8% Growth with 12% Std DeviationBased on 8% Growth with 12% Std Deviation
-10000000
-5000000
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
Retirement Planning
How do I protect against market downturns?
Divide Money into 3 buckets
• Short term (1 to 3 years)• Mid term (3 to 7 years)• Long term (7 years out)
Short Term Money
• 1 to 2 year CDs• T-Bills• Money Market
Mid Term Money
• 3 to 5 year CDs• Mid term treasuries• Annuities
Long Term Money
• Stocks/Bonds• Real Estate• Commodities
Managing your “Buckets”
Periodically replenish your short and mid term buckets when you have gains in your
long term bucket.
How Much Should I Spend?
• Rule of Thumb – Only take 4% of portfolio
• Lower for younger ages (3%)• Higher for older ages (5%)
How should I be invested?
Depends on how close you are to retirement and how much you need from your portfolio.
Sample Portfolios
10 years or longer from retirement
May 3, 2023 Page18
Investment PolicyInvestment Policy
Bonds12%
Money Market3%
Commodities6%
Real Estate12%
Stocks67% `
Sample Portfolios
5 years from retirement
May 3, 2023 Page20
Investment PolicyInvestment Policy
Bonds32%
Money Market3%
Commodities5%
Real Estate9%
Stocks51%
Sample Portfolios
At retirement
May 3, 2023 Page22
Investment PolicyInvestment Policy
Bonds52%
Commodities3%
Real Estate7%
Stocks35%
Money Market3%
Investment PlanningCommon Questions/Issues
• How long will my money be invested?
• How much fluctuation can I stand?
• How much can I spend and when?