Comments on: How To Create A Seven Figure Residual Income http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/ Personal Development for Polymaths Wed, 16 May 2012 19:19:51 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Anti http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-151550 Anti Mon, 07 Feb 2011 23:45:52 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-151550 Well it is not as easy as just adding those numbers together and compounding them as if the return was interest paid regularly. Yes there are stocks out there which may return 10% annually, some may even return 1000% annually if you are lucky enough and spot them in time. It is generally agreed that S&P 500 returns 12% annually, but average investor gets only 2.5%. How come? There are other factors such as emotions, fees, recessions (such as the latest one) which cause that an average investor is not able to beat the market. In this light your calculation is hypothetical only and a very few investors would be able to get even close to it. Well it is not as easy as just adding those numbers together and compounding them as if the return was interest paid regularly.

Yes there are stocks out there which may return 10% annually, some may even return 1000% annually if you are lucky enough and spot them in time.

It is generally agreed that S&P 500 returns 12% annually, but average investor gets only 2.5%. How come? There are other factors such as emotions, fees, recessions (such as the latest one) which cause that an average investor is not able to beat the market.

In this light your calculation is hypothetical only and a very few investors would be able to get even close to it.

]]> By: Richard | RichardShelmerdine.com http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-48296 Richard | RichardShelmerdine.com Thu, 29 Apr 2010 11:13:24 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-48296 I'm just 21 so this definitely applies to me. It's a great article and doing the numbers actually shows how easy it is once you set the system into place. I’m just 21 so this definitely applies to me. It’s a great article and doing the numbers actually shows how easy it is once you set the system into place.

]]> By: John Hoff - eVentureBiz http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-3056 John Hoff - eVentureBiz Mon, 01 Sep 2008 18:28:21 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-3056 Try http://intellibiz.com/ John Hoff - eVentureBizs last blog post..<a href="http://feeds.feedburner.com/~r/eVentureBizBlog/~3/380154577/" rel="nofollow">Securing Your WordPress Blog: Post 5 - What To Do If Your Blog Is Cracked</a> Try http://intellibiz.com/

John Hoff – eVentureBizs last blog post..Securing Your WordPress Blog: Post 5 – What To Do If Your Blog Is Cracked

]]> By: Hunter Nuttall http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-3055 Hunter Nuttall Mon, 01 Sep 2008 18:21:30 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-3055 @ Real Estate Investor, sorry, I don't really know much about real estate. @ Real Estate Investor, sorry, I don’t really know much about real estate.

]]> By: Real Estate Investor http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-3027 Real Estate Investor Mon, 01 Sep 2008 04:33:48 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-3027 Are there other real estate reference materials you recommend? Thanx Are there other real estate reference materials you recommend? Thanx

]]> By: 2008: The Year In Review, And How To Make More Money | Hunter Nuttall . com http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-1840 2008: The Year In Review, And How To Make More Money | Hunter Nuttall . com Wed, 02 Jul 2008 06:16:13 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-1840 [...] Thanks to years of somewhat extreme frugality and compound interest, I make decent passive income from stock mutual funds. In the long run, this will be by far my [...] [...] Thanks to years of somewhat extreme frugality and compound interest, I make decent passive income from stock mutual funds. In the long run, this will be by far my [...]

]]> By: Hunter Nuttall http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-729 Hunter Nuttall Sun, 04 May 2008 19:27:57 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-729 John, a mutual fund is simply any fund where multiple investors pool their money. A mutual fund's assets can be invested in money markets (maybe a 4% return, I'm not sure), bonds (maybe a 6% return), or stocks (maybe a 10% return). As they say, past performance is no guarantee of future results, but this is roughly what history has shown so far. Performance can vary wildly, especially over short periods of time, and when a fund isn't well diversified. I don't like to say that people should "expect" any particular return, but looking in the past, 4% - 6% could have easily been achieved with a mix of CDs and different types of mutual funds. John, a mutual fund is simply any fund where multiple investors pool their money. A mutual fund’s assets can be invested in money markets (maybe a 4% return, I’m not sure), bonds (maybe a 6% return), or stocks (maybe a 10% return).

As they say, past performance is no guarantee of future results, but this is roughly what history has shown so far. Performance can vary wildly, especially over short periods of time, and when a fund isn’t well diversified.

I don’t like to say that people should “expect” any particular return, but looking in the past, 4% – 6% could have easily been achieved with a mix of CDs and different types of mutual funds.

]]> By: John Hoff http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-720 John Hoff Sat, 03 May 2008 17:43:25 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-720 Thanks for the breakdown. You know, I wrote a blog article called "Understanding the Time-Value of Money." This is the perfect example of how investors need to understand this principle. As time goes on, the value of money decreases - mortgage companies understand this well. From what I know about stock values, the average person investing in CDs and mutual funds can expect somewhere around a 4% - 6% return, is this correct? That's why I mentioned that example. <em>John Hoff's last blog post..<a href='http://feeds.feedburner.com/~r/eVentureBizBlog/~3/281621274/' rel="nofollow">How To Buy A House Like A Real Estate Investor: Part 3 - More On Dealing With Down Payments</a></em> Thanks for the breakdown. You know, I wrote a blog article called “Understanding the Time-Value of Money.” This is the perfect example of how investors need to understand this principle.

As time goes on, the value of money decreases – mortgage companies understand this well.

From what I know about stock values, the average person investing in CDs and mutual funds can expect somewhere around a 4% – 6% return, is this correct? That’s why I mentioned that example.

John Hoff’s last blog post..How To Buy A House Like A Real Estate Investor: Part 3 – More On Dealing With Down Payments

]]> By: Hunter Nuttall http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-718 Hunter Nuttall Sat, 03 May 2008 13:37:00 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-718 John, I ran the numbers for your scenario of a $100 a month investment at 4.5% for 40 years. To make the calculation easier, I assumed annual investments of $1,200 at the end of the year instead of monthly investments of $100. (Monthly investments would result in slightly more money than annual investments made at the end of each year, or slightly less money than annual investments made at the beginning of each year, just based on how long the money has to compound.) The results: investing $1,200 at the end of each year, at a 4.5% rate of return, would result in $128,436 after 40 years. You would have invested $48,000 of your own money, so that means that you'd have a gain of $80,436. However, we have to consider taxes and inflation. This is where low rates of return really kill you. If inflation is 4%, then your 4.5% return is a measly 0.5% in real returns. Factor in taxes (if it's not a Roth), and your real return is probably negative! John, I ran the numbers for your scenario of a $100 a month investment at 4.5% for 40 years. To make the calculation easier, I assumed annual investments of $1,200 at the end of the year instead of monthly investments of $100. (Monthly investments would result in slightly more money than annual investments made at the end of each year, or slightly less money than annual investments made at the beginning of each year, just based on how long the money has to compound.)

The results: investing $1,200 at the end of each year, at a 4.5% rate of return, would result in $128,436 after 40 years. You would have invested $48,000 of your own money, so that means that you’d have a gain of $80,436.

However, we have to consider taxes and inflation. This is where low rates of return really kill you. If inflation is 4%, then your 4.5% return is a measly 0.5% in real returns. Factor in taxes (if it’s not a Roth), and your real return is probably negative!

]]> By: John Hoff http://hunternuttall.com/blog/2008/01/how-to-create-a-seven-figure-residual-income/comment-page-1/#comment-711 John Hoff Fri, 02 May 2008 11:48:15 +0000 http://hunternuttall.com/blog/2008/01/01/how-to-create-a-seven-figure-residual-income/#comment-711 Hey Hunter. Thanks for that report on Coca Cola but to me it's all a little confusing, but that's just because I don't know how to read stock charts. I should because I know stocks can be good, but it's a little too volatile for me and like you said, can take a long time. I think whether you go for stocks or real estate both take some knowledge and dedication to make it happen. Your article is a great example of why I think parents should start a fund when their child is born. You're the stock guy. What would $100/month invested into a CD or roth ira yielding a 4.5% return equal in 40 years? I have two children (2 and 3 weeks old), I need to start something for them. <em>John Hoff's last blog post..<a href='http://feeds.feedburner.com/~r/eVentureBizBlog/~3/281621274/' rel="nofollow">How To Buy A House Like A Real Estate Investor: Part 3 - More On Dealing With Down Payments</a></em> Hey Hunter. Thanks for that report on Coca Cola but to me it’s all a little confusing, but that’s just because I don’t know how to read stock charts. I should because I know stocks can be good, but it’s a little too volatile for me and like you said, can take a long time.

I think whether you go for stocks or real estate both take some knowledge and dedication to make it happen. Your article is a great example of why I think parents should start a fund when their child is born.

You’re the stock guy. What would $100/month invested into a CD or roth ira yielding a 4.5% return equal in 40 years?

I have two children (2 and 3 weeks old), I need to start something for them.

John Hoff’s last blog post..How To Buy A House Like A Real Estate Investor: Part 3 – More On Dealing With Down Payments

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