An Investment Average of 10% won’t Guarantee Success

//An Investment Average of 10% won’t Guarantee Success

An Investment Average of 10% won’t Guarantee Success

An Investment Average of 10% won’t Guarantee Success

I saw a great advertisement released by my office’s parent company today; I have never released what my office’s parent company is…and I am not about to start now! Notwithstanding my obsession with privacy, I couldn’t get over this info and felt like I should share.

Each portfolio has an overage return of 10%, a withdrawal of $30,000 fixed at 3% inflation, and starts with $500,000…yet the first portfolio leaves the person with a little over $19,000 while the second portfolio leaves a person with over $2,500,000!

Portfolio 1                                                                      Portfolio 2

YearInvestment ReturnWithdrawalAccount BalanceYearInvestment ReturnWithdrawalAccount Balance
1-8.4%$30,000$427,90011.3%$30,000$476,600
24.0%$30,900414,030210.1%30,900493,646
314.3%$31,827441,41037.6%31,827499,385
419.0%$32,782492,275430.4%32,782618,417
5-14.8%$33,765385,7525-3.1%33,765565,419
6-26.5%$34,778248,942631.5%34,778708,917
737.3%$35,822305,976716.8%35,822792,335
823.7%$36,896341,59685.2%36,896796,799
9-7.3%$38,003278,793918.6%38,003906,602
106.6%$39,143257,9661032.0%39,1431,157,884
1118.6%$40,317265,631116.1%40,3171,188,270
1232.1%$41,527309,4511222.4%41,5271,412,559
13-4.9%$42,773251,4841321.1%42,7731,667,978
1421.1%$44,056260,51614-4.9%44,0561,542,024
1522.4%$45,378273,4161532.1%45,3781,992,099
166.1%$46,739243,3831618.6%46,7392,315,890
1732.0%$48,141273,197176.6%48,1412,419,903
1818.6%$49,585274,29018-7.3%49,5852,194,633
195.2%$51,073273,5351923.7%51,0732,663,688
2016.8%$52,605224,8832037.3%52,6053,604,638
2131.5%$54,183241,60521-26.5%54,1832,597,028
22-3.1%$55,809178,28222-14.8%55,8092,157,378
2330.4%$57,483174,9972319.0%57,4832,508,718
247.6%$59,208129,1072414.3%59,2082,808,257
2510.1%$60,98481,111254.0%60,9842,859,042
261.3%$62,81319,36926-8.4%62,8132,555,498

2 Questions for the analytics out there:

  1. What product do you think my company is trying to sell? hint – I have never sold this product, nor do I own one…
  2. What is the correlation between Portfolio 1 and Portfolio 2? hint – both portfolios represent the same time period

I need guesses!

By | 2013-09-26T15:01:56+00:00 March 23rd, 2009|Investments|1 Comment

About the Author:

Evan is the owner of My Journey to Millions which was started to track his journey from a broke debt ridden law school graduate to building a positive balance. Need more Evan? Follow him on Twitter, Contact him or get new posts directly to your email

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