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I follow a few email lists. Whenever they list is not related to Linux, there are always MS-Windows questions. With the release of Windows7, more and more of those questions are about specific software working under Windows7, especially when there were issues under Vista. Most of this article was taken from an email concerning Investors Toolkit, TK6, and whether it will run on Win7 on a Netbook.

The Questions

Can Window7 run … whatever-program

I came across this article from my insurance company today that has tables and graphs the percentage of income that should be saved based on your age and approximate annual income.

The tables don’t cover all income levels and don’t address income increases over the years.

Many financial planners use 80% of your income as the target for retirement needs. People that plan to travel will need more. Quick summary for 80% replacement:

Basically, if you haven’t started saving 20% of your income by age 35, then you are in BIG trouble!!! Plan on working until you’re dead, since kids and mortgages will prevent you from saving what is needed.

Table 3 in the article has the Assets Needed when you’re 65 to provide 80% cash flow. The table is in todays dollars and it assumes Social Security is paid and it is only for 1 person.

I’m worried that I over simplified this article, so take 10 minutes to read it.

Ok, I upgraded my Quicken from 2006 Deluxe to 2008 Premium. I do this mainly to get access to new and better stock tracking tools.

• I feel ripped off.
• 2008 is slower
• 2008 doesn’t appear to have anything in it that 2006 didn’t already have.
• 2008 fonts are larger and I can’t find a way to make them smaller
• 2008 wastes screen real estate for no reason I can figure out.
• News story updates still don’t work.

A newby to Quicken will probably like the new look and feel, it feels easier and simpler. I’ve been using Quicken since 1990 – heck, I can probably find a text-only DOS version laying around here that does what I need.

• MI – Stock Screening
• Manifest Investing – Solomon’s Select Dashboard
• Manifest Investing – Tin Cup Dashboard
• Manifest Investing – Creme List Dashboard
• Manifest Investing – ETF Sector Radar Dashboard
• Manifest Investing – Fundamental Forecasts
• Manifest Investing – ICLWager Dashboard
• Manifest Investing – Challenge Club Dashboard
• Manifest Investing – Manifest 40 Public Dashboard

My public Watch List of stocks, assorted Mutual Funds, and ETFs.

I caught the end of a reality show and saw the legalese at the end saying that the $1,000,000 prize was in the form of a 40 year annuity or current cash value. So, I did a quick calculation in Excel to figure out what that annuity would be. $220/month over 40 years earning 9% interest is $1,037,615.

If you put a lump sum in now and never add anymore money, you’d need $70,000 at 9% interest to grow to $1,031,140 over 40 years.

Could you save $220 per month with an understanding that after 40 years, it would be likely to be at least $1M?

Another example, shorter time frame: $400 a month over 30 years at 9% is $737,000. Compound interest and lots of time rocks! Use it!

Is there any good excuse not to become a millionaire when it is sooooo easy? 9% interest isn’t very much. This is about what the US Stock Market does annually over any 20 year period. You don’t have to be a good investor, just put the money in monthly and do not pay attention to it. Consistency. Consistency. Consistency.

How are you doing on your $1M? Check it with this simple calculation that happens to work in 2006 (it won’t work in later years due to inflation):
Multiply your age times your realized pre-tax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be.

So, if you’re 40 years old and earn $95,000 in salary and $5,000 from investments pre-tax, then your net worth should be $400,000 (40 times 100,000 divided by 10). If this test shows you’re an "under accumulator of wealth," then you might want to think hard about making some changes.

Investing for retirement made simple. I’m not an investment advisor nor do I have any certifications related to investing.
If you don’t enjoy working with numbers, tracking down "cheap" companies selling at a good value and monitoring them daily, weekly, monthly, then here’s a simple set of ideas for doing reasonable well investing for retirement.

• Pay yourself first – whatever the monthly amount is that you are going to invest, consider it a bill just like your rent or mortgage.
• Save at least 10% of your GROSS income for retirement – this applies to both husband AND wife in a marriage. If you are single, you need to save more.
• Start saving early – it is amazing the difference that starting at 25 years old makes when compared to starting at 35 years of age. At age 55, the total amount is staggering.
• Asset allocation (putting a little money here and a little money there) is very important to ride the ups and downs for each part of the market.
• Unless you are 5-10 years away from retirement, avoid bonds. Some people will disagree with me on this.
• Ok, the target asset allocation for someone under 50 years old (in my opinion) is:
  • 50% Large CAP stocks (an S&P500 fund or ETF) These are the core of your investments, steady, predictable growth well above inflation is needed. If you want to be a little riskier, find a "value" Large CAP fund or ETF. Morning Star LrgCAP Funds
  • 30% Overseas (EFT or worldwide fund) You might ask why? Growth rates overseas are likely to be higher than in the USA over the next 30 years, IMHO. Morning Star Worldwide Funds
  • 20% Small/Mid CAP stocks (ETF) Smaller companies tend to grow faster than large companies, but they also tend to fail more. Morning Star Small CAP Value funds
• Be certain to take enough risks – Certificates of Deposit are not risky enough for your retirement, unless you are retiring within 5 years. Then you should ladder your CDs every year so that for any 5 year period, your income from your investments is completely guaranteed.
• Don’t put any money into any stock, mutual fund or ETF that you might need in the next 5-10 years. Sufficient time is important for risk management.
• Avoid market timing, something called Dollar Cost Averaging really does work – basically, this means send the same amount in every month. When the price is high, you buy fewer shares. When the price is low, you buy more shares. Simple. Be certain to buy those stocks that are cheap with your monthly inputs. AND don’t forget diversification! Never forget that.
• If you aren’t willing to do the time monitoring and researching, stay away from HOT TIPS from the gym and water cooler.
• Save for your retirement before saving for your child’s college education – college loans are easy. There’s no such thing as a retirement loan.
• A good enough guess for how much money you should have before retiring is 12x your annual salary. $50K calculates to $600K needed at retirement. There are many, many assumptions and your needs will be hirer or lower based on too many factors to assume. More conservative estimates go with 25x your annual salary – that’s $1.25M. Which do you think can better weather a 10 yr bear market or critical health issue?
• Here’s a retirement calculator that might be helpful to estimate how much you need to save to reach your goal – both IE and MS-Excel is required for it to work (sorry, it was too easy for me using these tools).
• Try to keep fees to a minimum by using a discount broker with lots of No Transaction Fee Mutual Funds and low fees to purchase stocks (Under $13 per trade). Avoid churn.
• Never buy a fund that requires a front-end or back-end load or 12b fees.
• Avoid high fee ETFs and Mutual Funds with fees over 1%.
• Look for top ranked mutual funds followed by Morning Star – try to purchase the mutual funds in the top 25% of short term and long term performance for the type of asset class you are trying to get. Mix Value and Growth AND Large, Mid, and Small CAP companies. Asset Allocation is critical.
• Be certain that you have 6-12 months of living expenses saved and available outside your retirement investments.
• You should be in good overall financial shape before you begin investing – no credit card debt, no long term car loans (over 3 years total), you get the idea. If you aren’t certain, you have a problem to be solved.
• Never have more than 20% of you total investments in a single investment – once you have $50K total. This includes the company stock that you work at. I count my annual salary towards this 10% rule and don’t have any company stock where I work – my salary is enough of an investment.
• Your house is only an investment if you can sell it. You will still need someplace to live.
• DO review your investments every quarter and verify you are in investments in the top, say 30% of the class for performance.and DO rebalance your portfolio annually to get back to the 50/30/20 allocations (approximately).
• If you do these simple things, anyone can retire with over $1M saved by saving $250/month. It just takes consistency over the 30+ years of saving. Average returns in your investments will get you there.
• Keep the market ups/downs in perspective with this graph

Some helpful links:

• Dollar Cost Averaging
• Asset Allocation | Asset Allocation is more important than the actual investments selected!=
• Yahoo Finance
• Mutual Fund
• EFT
• If you are looking for more Links … I currently use NAIC stock selection methods and Manifest Investing and have used The Chartist advisory service for multiple years. If you’re looking for an easy way to learn NAIC investing methods, check out.

Are you saving enough for retirement? Probably not according to PBS/Frontline.
Over a 30 year working life, experts say you need to save between 15%-18% of your salary.

PBS-Frontline for more.

Another simple way to guess what you need is 12x your salary is your target for retirement.
The 401(k) plan probably isn’t the best solution for your retirement unless you learn how to invest – unfortunately, it is probably the best option that you have. You really don’t have any choice — learn some basics about investing and get started.

Schwab says you should expect to need about 25x your last year expenses before your first year of retirement. Check it here

Don’t put this off. You need to understand this sooner than later. GET HELP if you need it.

Or you will probably end up working when you should be retired.

Intersted in ETFs? That is ‘Exchange Traded Funds":http://www.schwabiis.com/fundfocus.html. Here’s an article titled //Five Myths of Exchange-Traded Funds//.

The ’Ultimate Buy and Hold Strategy":http://www.fundadvice.com/FEhtml/BHStrategies/0108/0108a.html is an interesting read.

Ellis Traub wrote a great book called Take Stock which describes the NAIC – Better Investing Method to investing. Highly Recommended.