SEVEN FAT YEARS According to Social Security records, 85 out of 100 Americans have less than $250...
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Transcript of SEVEN FAT YEARS According to Social Security records, 85 out of 100 Americans have less than $250...
SEVEN FAT YEARS
According to Social Security records,
85 out of 100 Americans have less
than $250 when they reach age 65.
SEVEN FAT YEARS
Take up the fifth part of the land of Egypt in the seven plenteous years.
– Genesis 41:34
That the land perish not through the famine.– Genesis 41:36
SEVEN FAT YEARS
Joseph Principle:
Save during FAT years
for lean years
SEVEN FAT YEARS
• Saving vs. Hoarding
Genesis 41:46-57 Joseph saved 20%
Luke 12:16-21 Rich man had to build bigger barns
• How are these situations similar?
• How are they different?
• Why was God pleased with one, displeased with other?
SEVEN FAT YEARS
“…thou shalt lend unto many nations, and thou shalt not borrow.”
– Deuteronomy 28:12b
• Biblical definition of investing is to lend.
SEVEN FAT YEARS
Make Friends with Money
“Make to yourselves friends of the mammon of unrighteousness.”
– Luke 16:9
Educate yourself in money matters.
Generational Numbers
48 Million “Mature”
81 Million “Boomers”
38 Million “X-ers”
Previous Generation finances the retirement of present generation.
SEVEN FAT YEARS
SEVEN FAT YEARS
Social SecurityEmployer PlanIndividual
30%Employer
Plan
30%Social
Security
40%Individual
SEVEN FAT YEARS
ParentsIncome rose 524%
(age 20-30)
49 workers support 1 retiree
Average age at death 63
Peak earnings after kids gone
Homes appreciated greatly
(Buy Your Second Home First)
Paid Debt with inflated $
You34%
2.7 workers(2018)
90/95
still paying for kids
0-3% per yr.
1998 inflation 1.7%
SEVEN FAT YEARSHow Much Do I Need?
_____ 75% of gross
_____ + adjust for inflation 4% per year
_____ - subtract Social Security Earnings 1 (800) 772-1213 / www.ssa.gov
_____ - Employer - Call Human Resource
_____ - GapGap x 12 mo. Divided % return = savings needed.
$2000 x 12 = 24000 divided 12% = 200,000
SEVEN FAT YEARS
$200,000 @ 12% 20 years = $911.21
$200,000 divided $911.21 = $219.49 per month
amount need to save
$200,000 x 12% = $24,000
Not using principal
SEVEN FAT YEARS
Three plans for making a million by age 65, assuming the money ears 12% a year
• Age 25, start investing $59 a month
• Age 40, put $10,000 down AND
invest $493 a month
• Age 50, put $50,000 down AND
invest $1,540 a month
Three Principles for Lean Years
• Spend less than you earn - 5 to 20%– Pastor $8000 per year income– $1,663,000 liquid assets
• Remember the cost of lost opportunity
• Consider cost of making a mistake
SEVEN FAT YEARS
• 401 (K) - Modern Day Pension
• 403 (b)
• Employer Match
• Move funds if job changes
SEVEN FAT YEARS
• 401(K)
• 403(b)
• ROTH IRA-no tax on earnings from IRA
• IRA-no tax on contribution to IRA
Vehicle for investment
NOT the investment
SEVEN FAT YEARS
Current Contributions
• Pre-Tax Deferral Percent 7% of pay
• After-Tax Contribution Percent 0% of pay
• YTD Employee Contributions
$3,282.44
• YTD Company Contributions
$4,274.63
SEVEN FAT YEARS
Balances as of December 31, 1998
• Your Contributions Since 1/1/88 to REVSOP: $20,861.94
• Your Total REVSOP Balance:
$157,677.55
SEVEN FAT YEARS
Ways to invest IRA, 401(K), 403(b)• Cash- CD, Money Market• Annuity - contract with insurance co.• Mutual Funds
– very conservative - money market
– conservative - money market, bonds, stocks
– moderate - income producing stocks, large cap stocks
– growth - large cap stocks, mid-cap stocks
– aggressive - small cap stocks
SEVEN FAT YEARS
$166 month automatic withdrawal =
$2,000 per year
$332 month = $4,000 per year for two
SEVEN FAT YEARS
98 3yr 5yr 10yr
Washington Mutual (5.75%) 18 24 22 18
1-800-421-4120
Am. Century Inc/Grth 27 29 23
1-800-345-2021
Legg-Mason Value 47 41 32 21
1-800-577-8589
Janus Twenty 75 43 30 26
1-800-525-8983
Legg-Mason Value$10,000 Grew to $254,865 17yr
0
50,000
100,000
150,000
200,000
250,000
300,000
Value of Shares
SEVEN FAT YEARS
$0
$5,000
$10,000
$15,000
$20,000
$25,000In
flat
ion
Rat
e
U.S
.T
reas
ury
Lon
g-T
erm
Gov
ernm
ent
Lar
geC
ompa
ny
Growth of $1000(1973-1997)
SEVEN FAT YEARSUnderstanding Risk
-40%-30%-20%-10%
0%10%20%30%40%50%60%70%
SmallStocks
INTLStocks
LargeStocks
Bonds T Bills
PositiveAverageNegative
SEVEN FAT YEARS
$1,000 Deposited Each Year
End of Year Values
5 yrs 10 yrs 15 yrs 20 yrs
18% 7,154 23,521 60,965 146,628
20% 7,442 25,959 72,035 186,688
22% 7,740 28,657 85,192 237,989
24% 8,048 31,643 100,815 303,601
SEVEN FAT YEARS
Rule of 72
Divide 72 by rate of return =
# of years to double money
72 divide 18% = 4 years
72 divide 15% = 4.8 years
72 divide 12% = 6 years
SEVEN FAT YEARS
$130,000 - 4 yr 260,000 Age 40
- 8 yr 520,000 Age 44
- 12 yr 1,040,000 Age 48
- 16 yr 2,080,000 Age 52
- 20 yr 4,160,000 Age 56
- 24 yr 8,320,000 Age 60
- 28 yr 16,640,000 Age 64
SEVEN FAT YEARS
BEGIN
WITH THE NEXT PAY RAISE