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Author: Rutabaga2000 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75701  
Subject: Re: Where to from here? Date: 3/31/2000 6:16 PM
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>>What kind of return were you expecting from the 
>>Foolish 4 again?

>>Sacto Fool

Here's what my math looks like.  There are at least a
few flaws in it.  Flaw 1 - my income never changes.
Flaw 2 - I never stop contributing - and I'm still
working at 76 years old.  Flaw 3 - I'm calculating
interest off the amount at the beginning of the 
year instead of quarterly.  Nonetheless, the
differences are striking.  For the first 20
years the IRA lags the 401(K).  But by year 34, the
IRA is worth double the amount in the 401(k).  And
after 50 years, the IRA is at 43 mil, gaining over 5
million dollars per year, and accelerating.
Meanwhile, the pokey old 401(k) is
at a "measly" 7 million, and growing by 700K annually.
If anyone sees more flaws, let me know.  It really
looks like IRA is the way to go.   


Strategy 1 - Put all the money in a 401(k)					

	Assumptions:  $5000 starting balance.  Employee contribution				
	is $3900 annually.  Employer contribution: $2450 annually.				
	Assumed 10% interest.				

Year	Start Bal.	My contrib.	Employer 	Interest 	End Bal.
0	 $(0.00)	 $5,000.00 	 $(0.00)	 $(0.00)	 $5,000.00 
1	 $5,000.00 	 $3,900.00 	 $2,450.00 	 $500.00 	 $11,850.00 
2	 $11,850.00 	 $3,900.00 	 $2,450.00 	 $1,185.00 	 $19,385.00 
3	 $19,385.00 	 $3,900.00 	 $2,450.00 	 $1,938.50 	 $27,673.50 
4	 $27,673.50 	 $3,900.00 	 $2,450.00 	 $2,767.35 	 $36,790.85 
5	 $36,790.85 	 $3,900.00 	 $2,450.00 	 $3,679.09 	 $46,819.94 
6	 $46,819.94 	 $3,900.00 	 $2,450.00 	 $4,681.99 	 $57,851.93 
7	 $57,851.93 	 $3,900.00 	 $2,450.00 	 $5,785.19 	 $69,987.12 
8	 $69,987.12 	 $3,900.00 	 $2,450.00 	 $6,998.71 	 $83,335.83 
9	 $83,335.83 	 $3,900.00 	 $2,450.00 	 $8,333.58 	 $98,019.42 
10	 $98,019.42 	 $3,900.00 	 $2,450.00 	 $9,801.94 	 $114,171.36 
11	 $114,171.36 	 $3,900.00 	 $2,450.00 	 $11,417.14 	 $131,938.49 
12	 $131,938.49 	 $3,900.00 	 $2,450.00 	 $13,193.85 	 $151,482.34 
13	 $151,482.34 	 $3,900.00 	 $2,450.00 	 $15,148.23 	 $172,980.58 
14	 $172,980.58 	 $3,900.00 	 $2,450.00 	 $17,298.06 	 $196,628.64 
15	 $196,628.64 	 $3,900.00 	 $2,450.00 	 $19,662.86 	 $222,641.50 
16	 $222,641.50 	 $3,900.00 	 $2,450.00 	 $22,264.15 	 $251,255.65 
17	 $251,255.65 	 $3,900.00 	 $2,450.00 	 $25,125.56 	 $282,731.21 
18	 $282,731.21 	 $3,900.00 	 $2,450.00 	 $28,273.12 	 $317,354.34 
19	 $317,354.34 	 $3,900.00 	 $2,450.00 	 $31,735.43 	 $355,439.77 
20	 $355,439.77 	 $3,900.00 	 $2,450.00 	 $35,543.98 	 $397,333.75 
21	 $397,333.75 	 $3,900.00 	 $2,450.00 	 $39,733.37 	 $443,417.12 
22	 $443,417.12 	 $3,900.00 	 $2,450.00 	 $44,341.71 	 $494,108.83 
23	 $494,108.83 	 $3,900.00 	 $2,450.00 	 $49,410.88 	 $549,869.72 
24	 $549,869.72 	 $3,900.00 	 $2,450.00 	 $54,986.97 	 $611,206.69 
25	 $611,206.69 	 $3,900.00 	 $2,450.00 	 $61,120.67 	 $678,677.36 
26	 $678,677.36 	 $3,900.00 	 $2,450.00 	 $67,867.74 	 $752,895.09 
27	 $752,895.09 	 $3,900.00 	 $2,450.00 	 $75,289.51 	 $834,534.60 
28	 $834,534.60 	 $3,900.00 	 $2,450.00 	 $83,453.46 	 $924,338.06 
29	 $924,338.06 	 $3,900.00 	 $2,450.00 	 $92,433.81 	 $1,023,121.87 
30	 $1,023,121.87 	 $3,900.00 	 $2,450.00 	 $102,312.19 	 $1,131,784.06 
31	 $1,131,784.06 	 $3,900.00 	 $2,450.00 	 $113,178.41 	 $1,251,312.46 
32	 $1,251,312.46 	 $3,900.00 	 $2,450.00 	 $125,131.25 	 $1,382,793.71 
33	 $1,382,793.71 	 $3,900.00 	 $2,450.00 	 $138,279.37 	 $1,527,423.08 
34	 $1,527,423.08 	 $3,900.00 	 $2,450.00 	 $152,742.31 	 $1,686,515.39 
35	 $1,686,515.39 	 $3,900.00 	 $2,450.00 	 $168,651.54 	 $1,861,516.92 
36	 $1,861,516.92 	 $3,900.00 	 $2,450.00 	 $186,151.69 	 $2,054,018.62 
37	 $2,054,018.62 	 $3,900.00 	 $2,450.00 	 $205,401.86 	 $2,265,770.48 
38	 $2,265,770.48 	 $3,900.00 	 $2,450.00 	 $226,577.05 	 $2,498,697.53 
39	 $2,498,697.53 	 $3,900.00 	 $2,450.00 	 $249,869.75 	 $2,754,917.28 
40	 $2,754,917.28 	 $3,900.00 	 $2,450.00 	 $275,491.73 	 $3,036,759.01 
41	 $3,036,759.01 	 $3,900.00 	 $2,450.00 	 $303,675.90 	 $3,346,784.91 
42	 $3,346,784.91 	 $3,900.00 	 $2,450.00 	 $334,678.49 	 $3,687,813.40 
43	 $3,687,813.40 	 $3,900.00 	 $2,450.00 	 $368,781.34 	 $4,062,944.74 
44	 $4,062,944.74 	 $3,900.00 	 $2,450.00 	 $406,294.47 	 $4,475,589.21 
45	 $4,475,589.21 	 $3,900.00 	 $2,450.00 	 $447,558.92 	 $4,929,498.13 
46	 $4,929,498.13 	 $3,900.00 	 $2,450.00 	 $492,949.81 	 $5,428,797.95 
47	 $5,428,797.95 	 $3,900.00 	 $2,450.00 	 $542,879.79 	 $5,978,027.74 
48	 $5,978,027.74 	 $3,900.00 	 $2,450.00 	 $597,802.77 	 $6,582,180.51 
49	 $6,582,180.51 	 $3,900.00 	 $2,450.00 	 $658,218.05 	 $7,246,748.57 
50	 $7,246,748.57 	 $3,900.00 	 $2,450.00 	 $724,674.86 	 $7,977,773.42 
					
					
					
					
Strategy 2 - Foolish 4 IRA					
	Assumptions - $5000 starting balance.  $2000 annual IRA contribution				
	No employer contribution.  17% interest rate on Foolish 4 stocks				
	(You Have More Than You Think - p.201)				

Year	Start Bal.	My contrib.	Employer 	Interest 	End Bal.
0	 $(0.00)	 $5,000.00 	 $(0.00)	 $(0.00)	 $5,000.00 
1	 $5,000.00 	 $2,000.00 	 $(0.00)	 $850.00 	 $7,850.00 
2	 $7,850.00 	 $2,000.00 	 $(0.00)	 $1,334.50 	 $11,184.50 
3	 $11,184.50 	 $2,000.00 	 $(0.00)	 $1,901.37 	 $15,085.87 
4	 $15,085.87 	 $2,000.00 	 $(0.00)	 $2,564.60 	 $19,650.46 
5	 $19,650.46 	 $2,000.00 	 $(0.00)	 $3,340.58 	 $24,991.04 
6	 $24,991.04 	 $2,000.00 	 $(0.00)	 $4,248.48 	 $31,239.52 
7	 $31,239.52 	 $2,000.00 	 $(0.00)	 $5,310.72 	 $38,550.24 
8	 $38,550.24 	 $2,000.00 	 $(0.00)	 $6,553.54 	 $47,103.78 
9	 $47,103.78 	 $2,000.00 	 $(0.00)	 $8,007.64 	 $57,111.42 
10	 $57,111.42 	 $2,000.00 	 $(0.00)	 $9,708.94 	 $68,820.36 
11	 $68,820.36 	 $2,000.00 	 $(0.00)	 $11,699.46 	 $82,519.82 
12	 $82,519.82 	 $2,000.00 	 $(0.00)	 $14,028.37 	 $98,548.19 
13	 $98,548.19 	 $2,000.00 	 $(0.00)	 $16,753.19 	 $117,301.38 
14	 $117,301.38 	 $2,000.00 	 $(0.00)	 $19,941.23 	 $139,242.62 
15	 $139,242.62 	 $2,000.00 	 $(0.00)	 $23,671.24 	 $164,913.86 
16	 $164,913.86 	 $2,000.00 	 $(0.00)	 $28,035.36 	 $194,949.22 
17	 $194,949.22 	 $2,000.00 	 $(0.00)	 $33,141.37 	 $230,090.58 
18	 $230,090.58 	 $2,000.00 	 $(0.00)	 $39,115.40 	 $271,205.98 
19	 $271,205.98 	 $2,000.00 	 $(0.00)	 $46,105.02 	 $319,311.00 
20	 $319,311.00 	 $2,000.00 	 $(0.00)	 $54,282.87 	 $375,593.87 
21	 $375,593.87 	 $2,000.00 	 $(0.00)	 $63,850.96 	 $441,444.83 
22	 $441,444.83 	 $2,000.00 	 $(0.00)	 $75,045.62 	 $518,490.45 
23	 $518,490.45 	 $2,000.00 	 $(0.00)	 $88,143.38 	 $608,633.82 
24	 $608,633.82 	 $2,000.00 	 $(0.00)	 $103,467.75 	 $714,101.57 
25	 $714,101.57 	 $2,000.00 	 $(0.00)	 $121,397.27 	 $837,498.84 
26	 $837,498.84 	 $2,000.00 	 $(0.00)	 $142,374.80 	 $981,873.64 
27	 $981,873.64 	 $2,000.00 	 $(0.00)	 $166,918.52 	 $1,150,792.16 
28	 $1,150,792.16 	 $2,000.00 	 $(0.00)	 $195,634.67 	 $1,348,426.83 
29	 $1,348,426.83 	 $2,000.00 	 $(0.00)	 $229,232.56 	 $1,579,659.39 
30	 $1,579,659.39 	 $2,000.00 	 $(0.00)	 $268,542.10 	 $1,850,201.49 
31	 $1,850,201.49 	 $2,000.00 	 $(0.00)	 $314,534.25 	 $2,166,735.74 
32	 $2,166,735.74 	 $2,000.00 	 $(0.00)	 $368,345.08 	 $2,537,080.81 
33	 $2,537,080.81 	 $2,000.00 	 $(0.00)	 $431,303.74 	 $2,970,384.55 
34	 $2,970,384.55 	 $2,000.00 	 $(0.00)	 $504,965.37 	 $3,477,349.93 
35	 $3,477,349.93 	 $2,000.00 	 $(0.00)	 $591,149.49 	 $4,070,499.41 
36	 $4,070,499.41 	 $2,000.00 	 $(0.00)	 $691,984.90 	 $4,764,484.31 
37	 $4,764,484.31 	 $2,000.00 	 $(0.00)	 $809,962.33 	 $5,576,446.65 
38	 $5,576,446.65 	 $2,000.00 	 $(0.00)	 $947,995.93 	 $6,526,442.58 
39	 $6,526,442.58 	 $2,000.00 	 $(0.00)	 $1,109,495.24 	 $7,637,937.81 
40	 $7,637,937.81 	 $2,000.00 	 $(0.00)	 $1,298,449.43 	 $8,938,387.24 
41	 $8,938,387.24 	 $2,000.00 	 $(0.00)	 $1,519,525.83 	 $10,459,913.07 
42	 $10,459,913.07  $2,000.00 	 $(0.00)	 $1,778,185.22 	 $12,240,098.30 
43	 $12,240,098.30  $2,000.00 	 $(0.00)	 $2,080,816.71 	 $14,322,915.01 
44	 $14,322,915.01  $2,000.00 	 $(0.00)	 $2,434,895.55 	 $16,759,810.56 
45	 $16,759,810.56  $2,000.00 	 $(0.00)	 $2,849,167.79 	 $19,610,978.35 
46	 $19,610,978.35  $2,000.00 	 $(0.00)	 $3,333,866.32 	 $22,946,844.67 
47	 $22,946,844.67  $2,000.00 	 $(0.00)	 $3,900,963.59 	 $26,849,808.27 
48	 $26,849,808.27  $2,000.00 	 $(0.00)	 $4,564,467.41 	 $31,416,275.67 
49	 $31,416,275.67  $2,000.00 	 $(0.00)	 $5,340,766.86 	 $36,759,042.54 
50	 $36,759,042.54  $2,000.00 	 $(0.00)	 $6,249,037.23 	 $43,010,079.77 
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