The Software that Tells the Whole Truth about All Things Financial


How to Calculate Rate of Return On A Real Estate Investment (John & Jane Jones Pt. 6 of 9)

How to Calculate Rate of Return On A Real Estate Investment (John & Jane Jones Pt. 6 of 9)
“Hello, this is John Jones.  I know we have called a number of times with ‘opportunities’ but this time I think we really have one,” John said excitedly as I answered the telephone early Monday morning before my first appointment. “That is good news,” I said.  “Do you want to tell me about it over the telephone or come in fo… Continue Reading

Average Does Not Equal Actual

Average Rates of Return are often touted by financial experts, and yet simple math can show us that Average does not equal Actual. Pretend that you invested $100,000 into a mutual fund that had promised an average rate of return of 25% if you left the money alone for 2 years. In the first year it earned 100%. After the first year, the investment would look like this: In the s… Continue Reading

How do I tell about the Dow in 100 years?

How do I tell about the Dow in 100 years? In the year 1900 the Dow Jones Industrial Average was 65.29. One hundred years later it was 11,600. Using a Rate Calculator from Truth Concepts we can see that 65 (the calculator doesn’t round internally but it prints that way) growing to 11,600 over 100 years is 5.32%. So the Dow has averaged 5.32% over those 100 years.   What if we looContinue Reading

How do I figure out if I can get ahead by earning 6% if I have an 8% cost?

How do I figure out if I can get ahead by earning 6% if I have an 8% loan? At first glance, the answer is obvious, you don’t get ahead.  However, sometimes we get confused and think that since an account (say at 6%) has an increasing balance while a loan (say at 8%) has a decreasing balance, we might be able to get ahead.  Let’s look at it to see the whole truth of the matter. T… Continue Reading

How Can We Prove a 15% Flat Tax is the Most Efficient?

Let’s use a Cash Flow Calculator from to tell the whole truth about what happens to an account when it gets taxed. We’ll put in $20 in 1913, the year the tax system started. We’ll show the account earning 20% per year. We can see below that the account has $798,784,476 (that’s $798 million) in it.   This assumes no taxes or management fees were Continue Reading

Calculating Internal Rate of Return

How do you calculate the internal rate of return on an investment when the cash flows vary and you can’t use a typical financial calculator that only functions with the same stream of payments, not a varying stream?  For example, you invest in an oil well where you contribute $100,000 the first year and the second year there is a $20,000 capital call (meaning you co… Continue Reading

How To Figure Out If 12% Annually Is The Same As 1% Monthly?

How do you figure out if 12% annually is the same as 1% monthly? First take a Future Value Calculator on “annual” and put in $100,000 at 12% for 1 year, and it shows the FV to be $112,000.        Then take another Future Value Calculator set on “monthly” and put in $100,000 at 12% for 12 months, and it shows the FV to be $112,683.        Most banks compouContinue Reading

How Much Interest Do I Save By Paying My Life Insurance Premium Annually?

How do you calculate the cost of paying a life insurance premium monthly instead of annually?  Get a Rate Calculator from  Put the annual premium in the Present Value as a negative number (which changes it to Loan Balance) since the insurance company is loaning you the annual premium and you pay them back monthly.  Then make the mode “mon… Continue Reading

How Do You Know Which Is More Important In Building Wealth, Money Saved Or The Rate Of Return?

How do you know which is more important in building wealth, money saved or the rate of return?  From  in the calculator called Maximum Potential we can see that it is the money you save and the reduction of costs that matter, not the rate of return. We’ll look at a Period of 35 years with a personal example where you said your income was $100,000.  I… Continue Reading

Financial Planning vs. Prosperity Economics

Financial Planning vs. Prosperity Economics   Meets needs and goals only   Maximizes every dollar Retirement oriented   Abundant/Freedom oriented Product oriented (only what you buy)   Strategy oriented (what you do) Accumulate money   Accelerate money Rate of return focuses   Opportunity cost recovery focused Institutions control your money   You c… Continue Reading

Human Life Value And The Fallacy Of “Needs Analysis”

Would you buy a $50,000 car yet only insure it for $30,000 because you only NEEDED a $30,000 car? NO! and yet the life insurance industry does this all the time with people by completing a “needs analysis” to determine how much life insurance you “need”.  YOU don’t “need” any, but you family may.  However, trying to figur… Continue Reading

How Can Borrowing At 4% And Investing At 5% Be A 25% Return?

Do you know the whole truth about how interest rates work?  Did you know borrowing money at 4% and investing at 5% is not a 1% difference but a 25% return?  It may be a 1% spread, but the reason most people cannot identify the 25% return is we don’t typically use financial calculators (like an HP-12c ).  If we do use them, it is still hard to tell what is going on because we… Continue Reading