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How Valuable is Thirty-Thousand?

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You want some ugly math? Look at public pensions. They assume an expected rate of return above seven percent.

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What if that’s not met? In the real world, there are consequences.

Take, for example, a million-dollar portfolio. If you “need” a return of seventy thousand, or seven percent, what happens if you don’t get it? You’re underfunded. A more reasonable expectation would be, say, four percent, or forty thousand.

Pensions are invested in a mix of bonds and stocks, so getting stock market returns is basically impossible. In the above example, an actual return of four percent leaves a deficit of thirty-thousand.

Now, I want you to relate this math to your situation. If you have a job that pays thirty thousand, and you can safely get four percent on your money, continuing to work is like having $750,000 invested. That’s real money.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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