New Hampshire Underground

New Hampshire Underground => Voluntary Schooling => Liberty Scholarship Fund => Topic started by: joeyforpresident on July 09, 2005, 03:18 PM NHFT

Title: It pays to fund Mutual Funds
Post by: joeyforpresident on July 09, 2005, 03:18 PM NHFT

Guys, I don't know who is behind the LSF, but to maximize the long-term goals of the fund, I would highly recommend -- if it's not already in there now -- that you guys open an investment account with say, 10-12% interest a year. Compound interest works wonders, and the best way to insure that the scholarships are provided is to put it in mutual funds, allowing the market forces to work its magic.

Now, if the fund is already in a mutual fund, then forget I said anything. The key to remember is growing wealth so you can fund your cause(s).

Title: Re: It pays to fund Mutual Funds
Post by: Michael Fisher on July 09, 2005, 03:30 PM NHFT
Thanks, Joey!  I can't believe we hadn't thought of it before, but luckily Brian Sullivan came along and asked us to do one of these during the first few months of the LSF's existence.  We called it the Endowment Fund and put him in charge of it.  :)

Thanks for the advice!  You would not believe how many charitable organizations haven't thought of an endowment fund!   :o
Title: Re: It pays to fund Mutual Funds
Post by: joeyforpresident on July 10, 2005, 01:39 AM NHFT

Endowments I'm studying about as well, but I'm not  sure if the interest rates are as high as just a regular mutual fund.

Were you being sarcastic?

Anyway, endowments are used, yes, for a ton of nonprofit organizations' funds of all sorts. With the mutual funds, at least you can fully utilize the market, at interest rates that are set by the market, not by some bank or board of directors.

Endowments these days are also very rare.
Title: Re: It pays to fund Mutual Funds
Post by: Kat Kanning on July 10, 2005, 02:13 AM NHFT
I don't think he was being sarcastic.
Title: Re: It pays to fund Mutual Funds
Post by: Michael Fisher on July 10, 2005, 02:18 AM NHFT
Sarcasm is the second cousin of anger.  I'm very rarely sarcastic these days.  :)
Title: Re: It pays to fund Mutual Funds
Post by: Kat Kanning on July 10, 2005, 02:19 AM NHFT
Oh, a fellow insomniac :)
Title: Re: It pays to fund Mutual Funds
Post by: Michael Fisher on July 10, 2005, 02:20 AM NHFT
Oh, a fellow insomniac :)

No kidding!  And I have work tomorrow morning!!!   ;D
Title: Re: It pays to fund Mutual Funds
Post by: AlanM on July 10, 2005, 02:28 AM NHFT
Oh, a fellow insomniac :)

No, just can't sleep.  ;D
Title: Re: It pays to fund Mutual Funds
Post by: Dreepa on July 10, 2005, 02:38 AM NHFT
It still early for me... just got back from a day trip to Santa Cruz.. cramming CA sites in before we leave. :)
Title: Re: It pays to fund Mutual Funds
Post by: joeyforpresident on July 11, 2005, 12:59 PM NHFT

The cool thing about an endowment is that in case of death, it will pay a face amount, i.e., the death benefit.

It operates like life insurance.

But, this is just Joey the Financial Planner speaking, I'd dump all the funds from an endowment (which is probably more expensive anyway) into a mutual fund, say maybe a Roth IRA. You can write checks to the fund when they are needed, but the money goes in tax free, and comes out tax free (this is only on a Roth).

But, if you can afford the endowment, go ahead and keep it...but be careful, these life insurance death benefits can be very tricky, at least in the contracts that are handed out.

I'm learning to pick apart individual policies, and while I haven't been shown an endowment, I can still tell you what provisions to avoid, etc.
Title: Re: It pays to fund Mutual Funds
Post by: Kat Kanning on July 11, 2005, 03:58 PM NHFT
Thanks Joey.  I trust what Brian Sullivan is doing.  He's got his own financial advisor business.
Title: Re: It pays to fund Mutual Funds
Post by: Russell Kanning on July 11, 2005, 05:22 PM NHFT

The cool thing about an endowment is that in case of death, it will pay a face amount, i.e., the death benefit.

It operates like life insurance.
r u talking about an annuity?
Title: Re: It pays to fund Mutual Funds
Post by: PattyE on July 11, 2005, 11:06 PM NHFT
But, this is just Joey the Financial Planner speaking, I'd dump all the funds from an endowment (which is probably more expensive anyway) into a mutual fund, say maybe a Roth IRA. You can write checks to the fund when they are needed, but the money goes in tax free, and comes out tax free (this is only on a Roth).

Joey, you are correct about the money that comes out of a Roth IRA.? It is tax free, providing it has been five years since your Roth has been established and you are 59 1/2 or older.? Otherwise, your withdrawals will be subject to taxes and penalties.?

But the money that goes in is not tax free.? It goes in after taxes.

And, when you have a minute... I 'd like that list of investment accounts that earn 10 to 12% interest per year, please? ;)

 
Title: Re: It pays to fund Mutual Funds
Post by: AlanM on July 11, 2005, 11:12 PM NHFT
Correct me if I am wrong, but as I understand it, an Endowment Fund for a charity such as the LSF is merely an amount that is set aside that cannot be spent. Only the interest earned from it can be spent.
So what does this have to do with IRAs?
Title: Re: It pays to fund Mutual Funds
Post by: Dreepa on July 11, 2005, 11:49 PM NHFT
I think that Alan has it right.
Also Russell mention annuities.. maybe that is what he means. ???
Title: Re: It pays to fund Mutual Funds
Post by: PattyE on July 12, 2005, 12:09 AM NHFT
I think that Alan has it right.

Yep, he does.

An IRA (Individual Retirement Account) is a personal savings/investment plan that lets an individual set aside money for retirement.? ?It would not be possible to invest Liberty Scholarship Fund dollars in an IRA.
Title: Re: It pays to fund Mutual Funds
Post by: joeyforpresident on July 12, 2005, 01:04 AM NHFT

Well, I don't know what type of funds an endowment invests in. I know with my Roth IRA, the fund is managed by Van Kampen, and it's historic rate of return has been 10-11 percent a year.

Banks have their own little "investment" accounts too, but they give the peasants a 2-3 percent return while the bank CEOs make off with the other.

Crooked ba...

Anyway, annuities are going to run you in all sorts of IRS hoops. If the endowment works, great. Just wouldn't want someone like my mom for example to throw away $500 in a "bank investment acct" that "generates" 2-3% (if that) when a fund like mine could generate 10-12 percent.

Title: Re: It pays to fund Mutual Funds
Post by: KBCraig on July 12, 2005, 03:38 AM NHFT
Well, I don't know what type of funds an endowment invests in.

Joey, I admire your enthusiasm.

But you're selling your "financial advisor" services about as well as you're selling your viability as a Presidential candidate. To wit: it's better to remain silent and be thought a fool than to open your mouth and remove all doubt!

Best wishes for your future maturity,

Kevin
Title: Re: It pays to fund Mutual Funds
Post by: FSPinNY on August 21, 2005, 12:11 PM NHFT
Be careful Joey, lots of mixed-up financial information in your posts.

The global, balanced mutual fund that we're using for the LSF Endowment Fund for now, CIBCX,  has had the following average annual total returns thru 7/31/05:
1 year:  15.39%
3 years:  13.12%   
5 years: 10.19%
10 years:  10.73%
Lifetime (7/30/87): 10.98%
Risk level is less than half (.46) of a comparable global index (MSCI EAFE) (1.0). 
The Fund has won many awards over the years and performed better than the S&P 500 Index over its lifetime, yet it is balanced and currently contains 12% Cash and 22% Bonds.  I use it personally for my 'move to NH fund'.

Brian

Joey, I suggested to you before that you contact me about the company that you hired to work with in the financial services business - please do.  I have researched it more than once over the years for prospective clients...
Title: Re: It pays to fund Mutual Funds
Post by: tracysaboe on August 22, 2005, 06:20 AM NHFT
Pri-Merica PRedominently uses Smith Barney mutual funds.

They have a good track record. I know their Agressive Growth has been in Forbs top 10, several different years.

What's the name of the global fund you use?

Tracy