Category: Accumulation

Can Socialism Save Capitalism?

Bill Ackman, chairman of Pershing Square Capital Management, recently proposed an idea to “save” capitalism. Framed as a panacea for growing disillusionment with capitalism, he recommends that every child have a sum of money invested on their behalf. The idea is that an 8% annual return should make them millionaires by retirement. So is this idea viable? Can socialism save capitalism? And is it really the best way to “encourage greater financial literacy”?  Probably not.  Financial literacy is an admirable goal, yet there are a multitude of ways to reach that end.

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Comparing Taxes: Cats and Mice

Comparison of Accounts – After Tax Contribution with Annually Taxable Growth (Savings Account, Money Market, etc.) vs After Tax Contribution With Tax Deferred Growth (After Tax-Tax Deferred IRA, Permanent Life Insurance, etc.) vs After Tax Contribution with Tax Free Growth (Roth, Municipal Bond, etc.) vs. Tax Deductible (Pre-Tax) Contributions with Tax deferred Growth (401K, Tax Deductible IRA, etc.). This can be a difficult topic to understand and, unfortunately, this confusion has led to incorrect information being spread to the consumer by the media and the financial industry. The ultimate result

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How-To: Monte Carlo Simulations in Accumulation

The Accumulation calculator has always been particularly useful in depicting how the stock market can affect your assets, but now it’s even better. A few updates ago, Todd introduced a feature that can reverse or randomize the S&P rates, so that you can more effectively show “Monte Carlo” scenarios.  If you haven’t tried it yet, I’ll show you how.  The benefits? Not only can you back up your knowledge with how the market has performed in the past—you can demonstrate how slippery it can be to rely on chance. Because

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Truth Tip: Comparing Taxable vs. Tax-Deferred Accounts

We received this excellent question from a Truth Concepts user this week: Q. I am trying to do a comparison between using a qualified plan and a non-qualified plan.  I understand pretty well how to use the Qualified Plan calculator, however I want to show an “apples to apples comparison” assuming everything else is equal i.e. ROR, management fee, etc., but with the client paying taxes each year on their investment gains, so that at retirement the money they have to spend is tax free. A. That will be easiest

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Accumulation

When filling in the tax box on the right for Mutual Funds, the following guidance and definitions will be helpful.  Remember to get this tax box, the “MF?” box on the left must be checked.  This means the existing money plus any new payments will be taxed like a mutual fund.  To fill in the box, you’ll use 3 percentages that must equal 100%, for example, 20% + 30% + 50%.  Unrealized Long Term Capital Gains means the percent of the funds’ growth that “fell off the fund managers desk”

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Truth Tip Accumulation

The Accumulation Calculator shows the effectiveness of money growing (taxable, tax deferred, tax deductible and/or tax free) and it has multiple variable payment and withdrawal columns, the ability to vary the earnings rate, and to add term insurance and  other costs.  In this calculator you can create an exact copy of existing information currently in the calculator by pushing the “Duplicate” button on the top left.  PINK box means column showing but no #’s.  YELLOW box means #’s but no column showing.  BLUE box means #’s in the column and its

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