The Motley Fool Discussion Boards Previous Page Investing/Strategies / Retirement Investing URL:  http://boards.fool.com/cc-im-awaiting-the-conclusion-just-like-everyone-30626440.aspx Subject:  Re: Strategy comparison S&P500 vs. IUL [rev 1] Date:  4/8/2013  12:13 AM Author:  Rayvt Number:  71790 of 88542 CC: I'm awaiting the conclusion just like everyone else, but I see no one--that's right, no one--providing convincing evidence that investing in the S&P 500 over a sustained period of time will result in a final figure of \$92 million.the "back of the envelope" must be a bazillionair by now. MurrayS: I'm beginning to think someone does not know how to operate a spreadsheet or even how to calculate time value of money. ::sigh::Quick & dirty back-of-envelope:`Annual Growth Rate: 10.5%Col A is the depositCol B is the number of years for that deposit to growCol C is what that deposit grows to.The Formula (column C)is =A7 * ((1 + B\$4) ^ B7)Where "7" is the row number of that row.Cell B4 is the (constant) growth rate. Deposit # yrs Grows to\$10,000 40 \$542,614\$12,000 39 \$589,264\$12,000 38 \$533,271\$12,000 37 \$482,598\$12,000 36 \$436,740\$12,000 35 \$395,240\$12,000 34 \$357,683\$12,000 33 \$323,695\$12,000 32 \$292,937\$12,000 31 \$265,101\$12,000 30 \$239,911\$12,000 29 \$217,114\$12,000 28 \$196,483\$12,000 27 \$177,813\$12,000 26 \$160,916\$12,000 25 \$145,626\$12,000 24 \$131,788\$12,000 23 \$119,265\$12,000 22 \$107,932\$12,000 21 \$97,676\$12,000 20 \$88,395\$12,000 19 \$79,995\$12,000 18 \$72,394\$12,000 17 \$65,515\$12,000 16 \$59,289\$12,000 15 \$53,656\$12,000 14 \$48,557\$12,000 13 \$43,943\$12,000 12 \$39,768\$12,000 11 \$35,989\$12,000 10 \$32,569\$12,000 9 \$29,474\$12,000 8 \$26,673\$12,000 7 \$24,139\$12,000 6 \$21,845\$12,000 5 \$19,769\$12,000 4 \$17,891\$12,000 3 \$16,191\$12,000 2 \$14,652\$12,000 1 \$13,260 Total \$6,617,633\$6,617,633 20 \$48,747,040`This is getting embarrassing.Coming up with this spreadsheet took me less than 5 minutes.*Grow each deposit by the number of years remaining in the 40 year accumulation period, then add them together.* Grow that amount for the 20 year deccumulation period. Being a quick&dirty calculation, ignore the withdrawals. Withdrawal rate is \$60,000/yr from a ~\$7 million portfolio, which is negligible.Is \$48 million close enough to "bazillionaire" for you?It's in the same order-of-magnitude as the more complete calculations, so it lends credibility.========================I'd like to see a response to Murray's question: Could you please tell us what data has convinced you that IULs are better investments in the long run?Do you have any data, or is it just a gut feel and the attractiveness of the story (sales literature)? Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us