REACHING YOUR SAVINGS GOALS
If you are trying to save for the future, you can either commit a lump sum
or put in so much per year. The most effective and accurate method to determine
how much that is is through using a financial calculator. But, absent that,
the simple form below should help give you a rough estimate on what you need
to contribute.
A. Amount you need in the future ___________________________________
B. Years till needed ___________________________________
C. Amount already saved ___________________________________
D. What will it be worth in the future. ___________________________________
Line C times Factor 1
E. Additional funds needed ___________________________________
Line A minus line D
F. Amount that will be met from other sources ___________________________________
(Gifts, loans, etc.)
G. Total amount needed ___________________________________
(Line E minus F)
H. Annual savings to reach goal ___________________________________
Line G divided by Factor 2)
I. Amount needed to invest each week ___________________________________
Line H divided by 52.
FACTOR 1- What your savings will be worth in the future
| Number of Years till needed | Annual Return on Investments (After Taxes) |
| 3% | 6% | 8% | 10% | |
| 1 | 1.0300 | 1.0600 | 1.0800 | 1.1000 |
| 3 | 1.0927 | 1.1910 | 1.2597 | 1.3310 |
| 5 | 1.1593 | 1.3382 | 1.4693 | 1.6105 |
| 10 | 1.3439 | 1.7908 | 2.1589 | 2.5937 |
| 15 | 1.5580 | 2.3966 | 3.1722 | 4.1722 |
| 20 | 1.8061 | 3.2071 | 4.6610 | 6.7275 |
| 25 | 2.0938 | 4.2919 | 6.8485 | 10.8340 |
Factor 2- How much you need to invest to meet funds needed
| Number of Years till needed | Annual Return on Investments (After Taxes) |
| 3% | 6% | 8% | 10% | |
| 1 | 1.000 | 1.000 | 1.000 | 1.000 |
| 3 | 3.0909 | 3.1836 | 3.2464 | 3.3100 |
| 5 | 5.3091 | 5.6371 | 5.8666 | 6.1051 |
| 10 | 11.463 | 13.180 | 14.486 | 15.937 |
| 15 | 18.598 | 23.276 | 27.152 | 31.772 |
| 20 | 26.870 | 36.785 | 45.762 | 57.275 |
| 25 | 36.459 | 54.864 | 73.105 | 98.347 |
GROWTH OF TAX DEFERRED LUMP SUM AND MONTHLY CONTRIBUTIONS
| Money Market- 4% | Bonds- 6% | Stocks- 10% | Blend- 7% | |
| $25,000 in 10 years | 37,000 | 44,800 | 65,000 | 49,000 |
| $400 per month in 10 years | 59,000 | 65,500 | 82,600 | 69,000 |
| Total | $96,000 | $110,300 | $147,000 | $118,000 |
| $25,000 in 25 years | 66,000 | 107,200 | 271,000 | 136,000 |
| $400 [per month in 25 years | 206,000 | 277,000 | 531,000 | 324,000 |
| Total | $272,000 | $384,400 | $802,000 | $460,000 |
RICH: (1999) The richest 1% are middle aged and old, they are married, they are well educated. Nearly all are white. Households in the poorest 20% are generally young, about 66% are single; more than 33% have not finished high school. Only about 50% of these are white. Most of the wealth is in the form of unincorporated business real estate. They are owners of small businesses or professional practices. Stocks, bonds and other financial assets represent less than 33% of total value.