The Story of Goldilocks and the Three Retirement Contributions

By Jen Smith, The Millionaire Mommy Next Door

Once upon a time, Goldilocks went for a walk.  Pretty soon, she came upon her bank.  She asked the bank teller for her retirement account balance and when she was shown the number, she wept.

Goldilocks returned home to assess her budget and see where she could come up with some extra money to make regular IRA contributions. She thought about quitting her latte habit. $3 saved per day could grow to $177,706 in thirty years.

“This idea is too soft!” she exclaimed.

So she returned to her budget and considered cutting her housing and utility expenses in half by downsizing to a much smaller home. $1200 saved per month could compound into $2,389,653 in thirty years.

“This idea is too hard,” she said.

So she returned to her budget and took aim on her transportation costs. If she sold her car and used her city’s excellent public transportation system instead, she could save $780 per month. In thirty years, her retirement fund could blossom into $1,553,275.

“Ahhh, this idea is just right,” she said happily. Goldilocks sold her car, walked back to her bank, and made a contribution to her retirement account.

Thirty years later, Goldilocks retired, and lived happily ever after.

THE END

For illustration purposes, results were calculated at 10.00% ROI compounded annually. The actual rate of return is largely dependent on the type of investments you choose. Over the most recent 30 year span, from January 1, 1980 to December 31, 2009, the compound annual growth rate (annualized return) for the S&P 500, including reinvestment of dividends, was 11.29% (source). Total savings are calculated in actual dollars (not inflation-adjusted). A common measure of inflation in the U.S. is the Consumer Price Index (CPI), which has a long-term average of 3.1% annually (from 1925 through 2008).

same thing applied on betting, you can try yourself here judi domino terpercaya

The Investment Risk-Return Correlation

Q: Pam asks, “After my portfolio value dropped by 40%, I panicked and pulled out of the stock market. I have $150,000 sitting in my savings account, earning squat. I know I should put it back to work, but with the state of our economy, I don’t know what to do with it. Any thoughts?”

A: If you’re terrified of the volatile economic climate today and would be an insomniac if you were invested in the market, perhaps it’s best to keep it parked until you are emotionally and behaviorally ready to stomach the ride and stick to a strategy. Preserve your capital while you take some time to reassess your goals and risk tolerance, determine an appropriate (perhaps more conservative) asset allocation, and explore various investment strategies to find a good fit for your goals and personality.

First, let’s address the risk-return correlation. In subsequent posts, I’ll tackle the other pieces.

Generally speaking, the goal of an investor is to be compensated for the amount of risk they take. Better yet, the investor seeks out the best risk-adjusted return — I’ll discuss this piece later.

If you are willing to accept high volatility (investment risk) for a high potential return, consider investing in a diversified portfolio of:

• aggressive growth funds
• small cap stocks and funds
• micro-cap stocks and funds
• foreign company stocks
• international funds
• sector funds
• precious metal funds
• emerging market funds

If you are willing to accept moderate volatility (investment risk) for amoderate potential return, consider investing in a diversified portfolio of:

• large cap stocks and funds
• S&P 500 and Wilshire 5000 index funds
• convertible bonds
• high-yield (junk) bond funds

If you are willing to accept low volatility (investment risk) for a low potential return, consider investing in a diversified portfolio of:

• high quality short and intermediate term municipal and corporate bonds and bond funds
• US savings bonds
• Treasury bills and notes
• fixed annuities
• money market mutual funds

If you are willing to accept very low volatility (investment risk) for avery low potential return, consider investing in a diversified portfolio of:

• CD’s (Certificates of Deposit)
• money market deposit accounts
• interest-earning checking accounts
• savings accounts

the sample of a good investment is on a betting site here you can go kiu kiu online