The 20% Return You Won’t Get

A friend called me up to chat. He has had a great career and just completed a CEO post. He had just gotten a check from a company he worked for over 20 years. It was his retirement plan so I knew it had to be close to a 7 figure check. What he said next stunned and saddened me. He asked.

“Fern, can you get me 20% return on this money?”

Why did this so sad? Because here is a very intelligent guy with a great career and a good net worth and he doesn’t even have a clue as to what is a possible return with his money.

The S&P 500 Index is a the best gauge of the US equities market, and if you were to chart the returns of this index since its inception to now you will see that it has historically done 6.64%. Now that can be up or down from that –but that is our historical average.

HisWomanConcernCalculator of getting a 20% return from our markets are about the same chance as getting hit by lightening. Of course, there are lots of commodities speculators, short sale traders, forex trader, and penny stock traders who will gladly tell him what he wants to hear. But they won’t tell him about the risk he needs to take to get that kind of return. They also won’t tell him that any money that he loses right now, he will have a slim chance of making that back now that he is much older. They also won’t ask him what other money is available to supplement his social security benefits.

Financial Illiteracy is widespread and that is why I publish Mindful Money Magazine. We all need to start learning more about how to manage our money and not rely on salespeople who don’t have our financial interests first. You can do this and I can help. Send me an email at fern@wholeheartedway.com and let me know what you need to make the right financial decisions.

Take advantage of FREE Financial advice by fee-only Financial Advisors, February 12. See here for more information. 

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