A follow up from my newbie thread - 12 year goal

[ratsinvest]

Hi guys, as per Winner69's suggestion I've come up with some ideas on what I would like to achieve and what I can contribute towards achieving this.

I am 28 years old. I have $150k to invest. I can contribute at least $20k annually towards investing.

Below is a spreadsheet I came up with. The tax rate I am using is 28%.



Year
Cash Injection

Age

Initial
150000



1
20000
$182,240.00
29

Average Interest
7.20%
10.00%


2
20000
$216,801.28
30






3
20000
$253,850.97
31






4
20000
$293,568.24
32






5
20000
$336,145.16
33






6
20000
$381,787.61
34






7
20000
$430,716.31
35






8
20000
$483,167.89
36






9
20000
$539,395.98
37






10
20000
$599,672.49
38






11
20000
$664,288.91
39






12
20000
$733,557.71
40
















Year
Cash Injection

Age

Initial
150000



1
20000
$188,360.00
29

Average Interest
10.80%
15.00%


2
20000
$230,862.88
30






3
20000
$277,956.07
31






4
20000
$330,135.33
32






5
20000
$387,949.94
33






6
20000
$452,008.54
34






7
20000
$522,985.46
35






8
20000
$601,627.89
36






9
20000
$688,763.70
37






10
20000
$785,310.18
38






11
20000
$892,283.68
39






12
20000
$1,010,810.31
40







From my research it appears growth mutual funds target an average of 10% per annum before tax. Looking at some of the better performing funds e.g. Milford, have been achieving close to 15% over the last 5 years.

What are your thoughts on this?

[percy]

Check out www.piefunds.co.nz as well.

[ratsinvest]

Check out www.piefunds.co.nz (http://www.piefunds.co.nz) as well.

Thanks Percy. These guys appear to be doing very well. Also they've been around since 2007 which means they've been at it for a little while.

[ratsinvest]

Hmm, just had a chat with the guys at piefunds. They are only accepting investments for their new fund which they started in September. Perhaps I'll wait a bit and see how the fund performs. It is a pity you can't invest in their more mature funds.

[BIRMANBOY]

Good on you for setting out a plan. Growth mutual funds will have good spells and bad spells so expecting to get 12 years at 15% would be extremely unlikely. Also I would question why you would hand over responsibility for your investments to someone else. I can understand if you have no real interest in monitoring or maintaining it but at your age it should be eminently possible to learn and control it yourself. Having other people run your investments always costs money and is going to be hampered by their need to satisfy the majority of investors by not rocking the boat too much. Not suggesting this is bad necessarily but its nice to have some flexibility in how, what and when you choose your investments. Good luck.
Hi guys, as per Winner69's suggestion I've come up with some ideas on what I would like to achieve and what I can contribute towards achieving this.

I am 28 years old. I have $150k to invest. I can contribute at least $20k annually towards investing.

Below is a spreadsheet I came up with. The tax rate I am using is 28%.



Year

Cash Injection


Age


Initial

150000




1

20000

$182,240.00

29


Average Interest

7.20%

10.00%



2

20000

$216,801.28

30







3

20000

$253,850.97

31







4

20000

$293,568.24

32







5

20000

$336,145.16

33







6

20000

$381,787.61

34







7

20000

$430,716.31

35







8

20000

$483,167.89

36







9

20000

$539,395.98

37







10

20000

$599,672.49

38







11

20000

$664,288.91

39







12

20000

$733,557.71

40

















Year

Cash Injection


Age


Initial

150000




1

20000

$188,360.00

29


Average Interest

10.80%

15.00%



2

20000

$230,862.88

30







3

20000

$277,956.07

31







4

20000

$330,135.33

32







5

20000

$387,949.94

33







6

20000

$452,008.54

34







7

20000

$522,985.46

35







8

20000

$601,627.89

36







9

20000

$688,763.70

37







10

20000

$785,310.18

38







11

20000

$892,283.68

39







12

20000

$1,010,810.31

40








From my research it appears growth mutual funds target an average of 10% per annum before tax. Looking at some of the better performing funds e.g. Milford, have been achieving close to 15% over the last 5 years.

What are your thoughts on this?

[winner69]

Good on you for setting out a plan. Growth mutual funds will have good spells and bad spells so expecting to get 12 years at 15% would be extremely unlikely. Also I would question why you would hand over responsibility for your investments to someone else. I can understand if you have no real interest in monitoring or maintaining it but at your age it should be eminently possible to learn and control it yourself. Having other people run your investments always costs money and is going to be hampered by their need to satisfy the majority of investors by not rocking the boat too much. Not suggesting this is bad necessarily but its nice to have some flexibility in how, what and when you choose your investments. Good luck.

You sort of saying rats should do lots of homework and select a dozen or so solidly growing well managed stocks paying good divies and just sit on them with six monthly or annual reviews of the portfolio? Should we allow him say 5% to play with on the specs?

Others say we should not offer such advice but rats could do worse than taking his approach

What rats spreadsheet has hopefully shown him that steady returns and putting extra money in regularly will make him rich. Need to become a punter is there?

Good start rats

[BIRMANBOY]

Sounds good to me W69 but then again I'm just an old fuddy duddy and its probably hard for a young man to have the discipline to do that.
He seems to show some promise though so here's hoping.[:)QUOTE=winner69;441428]You sort of saying rats should do lots of homework and select a dozen or so solidly growing well managed stocks paying good divies and just sit on them with six monthly or annual reviews of the portfolio? Should we allow him say 5% to play with on the specs?

Others say we should not offer such advice but rats could do worse than taking his approach

What rats spreadsheet has hopefully shown him that steady returns and putting extra money in regularly will make him rich. Need to become a punter is there?

Good start rats[/QUOTE]