Drip in new money (Part 3)

Further to my earlier blogs "Drip in new money" in Mar2008, I have refined the table to a much easier version to use.How to use it:
a) Fix a monthly investment amount;
b) assume an annualized returns in % p.a (typically 5% to 9% p.a);
c) set a period of investment in number of years;
d) get the corresponding figure in the table matrix;
e) multiply the monthly investment amount by the figure in (d);
f) this would be the estimated gross portfolio value by the end of the set time frame.

Example:
a) investment sum-monthly $188
b) assume annualized returns: 8% p.a
c) investment period: 25 years
d) corresponding figure in the table matrix: 886.27
e) 886.27 multiply by 188
f) estimated portfolio value by end of 25 years: $166,618.04

You can use this table to cross-check the typical "5%" and "9%" in most (ILP) insurance-linked-policies' benefit illustration; You may find that it is more worthwhile to do "Buy Term Invest The Rest (BTITR)" than buying the ILP. You also need to set aside a portion of the monthly amount towards the premium of a term insurance plan for BTITR.

For example, for a sum of $200 per month, a 30-yr old may set aside $65-$70 for the term insurance plan and invest the balance $135-$140 into "Drip in new money".

Furthermore, if you are paying income taxes, you can reduce some taxes using SRS, something which insurance agents selling ILP will NOT (and probably NEVER) share with you.

Feel free to contact waynekohwg@gmail.com for details and clarifications.