Financial calculators: switch from annual to monthly mode or any other mode and it will ask you if you want to adjust the existing amounts to match. Pushing the “TOP” button: causes the calculator to stay on top of anything you are doing. Double clicking on any of the labels for the inputs in the calculator brings up that (other) financial calculator.Read More
How Can We Prove a 15% Flat Tax is the Most Efficient?
Let’s use a Cash Flow Calculator from www.truthconcepts.com 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 taken out during this time. If we adjusted the account for inflation, assuming a 4% annual rate, it would have $18,502,442 ($18 million) inRead More
How to Calculate the Lost Opportunity Cost of the Typical way to Educate Kids.
How to Calculate the Lost Opportunity Cost of the Typical way to Educate Kids. A college education that cost $30,000 per year in today’s dollars with a 6% inflation for a 4 and a 6 year old will remove $2,187,493 from the parents wealth by the time they are 68 years old. How? The actual cost of the school plus the opportunity cost of the money removed from the parents’ estate assuming it was earning 5%. We’ll use a Cash Flow Calculator from www.truthconcepts.com to tell you the whole truthRead More
How To Get One Dollar To Do Many Jobs
First let’s define what a job is. Any time a dollar buys an asset, pays an insurance premium, reduces tax, increases cash flow, leverages itself, improves protection, recaptures opportunity cost, improves liquidity, recovers control, enables tax benefits, builds confidence, gains movement or lowers restrictions, that dollar is doing one job. And in many products it can do 2 or 3 (products are things you buy). In many strategies it can do 5 or 6 additional (strategies are things you do.) So many people limit their prosperity potential by havingRead More
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 contribute $20,000 more). Then in the third year, there wasn’t any income but starting in the fourth year, you received the following stream, $30,000, $25,000,Read More
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 www.truthconcepts.com 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. It should increase at least 4% a year if not more and for starters we’ll set an after tax Earnings rate of 5%.Read More
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 control your money Uncoordinated Integrated Micro (vacuum) based Macro (big picture) based Net worth is measurement Cash flow is measurement Money stays still Money moves Dollars do only one job Dollars do manyRead More
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 can not see all the numbers at one time since the screen only shows theRead More