Don’tMajorintheMinors!
WhataretheMajors?
1. Budgeting:
a. Budgetingdoesn’thavetobecomplex;focusoncashinvs.cashout.
b. Savefirstandspendthebalance.
c. Budgetingapps
i. Acorns(www.acorns.com)
ii. Mint(www.mint.com)
iii. DaveRamsey’sEveryDollar(www.everydollar.com)
2. TimeandCompoundInterest:
a. 1pennythatdoublesfor30daysvs.$1million?
i. Pennywillgrowtoover$5.3million
ii. Thepennydoesnotsurpass$1milliontillday28;bepatientwhenitcomes
tocompounding.
b. TheRuleof72
i. Aone-timeRothIRAcontributionof$5,000growingat7%annuallywill
doubleevery10years,soover40yearsitgrowsto$80,000.
c. Stockshaveoutpacedthebonds,treasurysecurities,andinflationoverthepast65
years.
3. Debt:
a. CowLoan
i. WestPointjuniorsaregivenaloanofroughly$35,000,payableoverthefive
yearsoftheiractiveduty.
ii. Manyelecttousethe$35,000tobuyanewcar.
iii. Ben;however,madeaverymaturedecisiontoinvest$32,000.
iv. UsingtheRuleof72,and7%annualreturn,thatinvestmentwillgrowto
over$500,000in40year(hisage62).
v. IfBenspentonanewCamaro,theultimatecostwouldbeover$500,000.
b. Neverusedebttopurchaseaconsumable,i.e.carortoothpaste
c. Nevercarryacreditcardbalance.
4. WhataretheMinors?
a. ShouldIbuystocks,mutualfunds,orexchangetradedfunds?
b. Whatfundcompanyisthebest?
c. ShouldIactivelytradeorbuy-and-hold?
2/26/16
Securities and Investment Advice Offered Through Investment Planners, Inc. (Member FINRA/SIPC)
And IPI Wealth Management, Inc., respectively, 226 W. Eldorado St., Decatur, IL 62522
16
Benefit of saving early
Growth of savings accounts
S AVING
F U N D AM ENTA L S
$1,200,000
› JljXe`em\jkj,#''' › 9`cc`em\jkj,#'''
› :_i`j`em\jkj,#'''
XeelXccpY\kn\\ek_\ XeelXccpY\kn\\ek_\ XeelXccpY\kn\\ek_\
X^\jf]),Xe[*,
X^\jf]*,Xe[-,
X^\jf]),Xe[-,
Saving
$1,000,000
› @ekfkXc#j_\`em\jkj
,'#'''
› @ekfkXc#_\`em\jkj
(,'#'''
(#'-/#'+/
› @ekfkXc#_\`em\jkj
)''#'''
Harnessing the power of
compounding can greatly
impact the amount of
savings over the long term.
$800,000
$600,000
,-)#-/*
$400,000
,',#*-,
$200,000
$0
25
30
35
40
45
50
55
60
65
Age
16
The above example is for illustrative purposes only and not indicative of any investment. Account value in this example assumes a 7% annual return.
Source: J.P. Morgan Asset Management.
Compounding refers to the process of earning return on principal plus the return that was earned earlier.
62138fnl.indd 16
5/26/15 7:00 PM
34
Major asset classes vs. inflation
Growth of one dollar
1950 – 2014
R IS K A V E R S E
$10,000
Small Cap Stocks
$4,384
Cash may not be an
effective long-term solution.
Large Cap Stocks
$1,101
$1,000
$100
Bonds
$50
Investing
Treasury Bills
$16
Inflation
$10
$10
$1
1950
34
1960
1970
1980
1990
2000
2010
Source: Morningstar, Inc., Financial Communications © 2015. All rights reserved. Used with permission.
Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1950. Assumes reinvestment of income and no
transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index.
Small-cap stocks in this example are represented by the Ibbotson® Small Company Stock Index. Large-cap stocks are represented by the Standard &
Poor’s 90® index from 1950 through February 1957 and the S&P 500 index thereafter, which is an unmanaged group of securities and considered to be
representative of the U.S. stock market in general. Government bonds are represented by the 20-year U.S. government bond, Treasury bills by the 30-day
U.S. Treasury bill, and inflation by the Consumer Price Index. Underlying data is from the Stocks, Bonds, Bills, and Inflation® (SBBI®) Yearbook, by Roger G.
Ibbotson and Rex Sinquefield, updated annually. An investment cannot be made directly in an index.
Government Bonds and Treasury Bills are guaranteed by the full faith and credit of the United States government as to the timely payment of principal
and interest, while stocks are not guaranteed and have been more volatile than the other asset classes. Small-capitalization stocks typically carry more
risk than stock funds investing in well-established “blue-chip” companies since smaller companies generally have a higher risk of failure. Historically,
smaller companies’ stock has experienced a greater degree of market volatility than the average stock.
62138fnl.indd 34
5/26/15 7:00 PM
February 19, 2016
A Hypothetical Illustration for
Jeff Secord Business History.20160218
PREPARED BY
Jeffrey R. Secord
Investment Planners, Inc.
213 W. Jefferson Street
Bloomington, IL 61701
Phone: 309-585-0909
Email: [email protected]
This report is not complete unless all pages, as
noted below, are included. Please read the
information in the 'Important Disclosures' found
at the beginning of this report.
Investments are not FDIC - insured, nor are
they deposits of or guaranteed by a bank or
any other entity, so they may lose value.
© 2016 Thomson Reuters
Page 1 of 6
Hypothetical Illustration
Jeff Secord Business History.20160218
Important Disclosures
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so
investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so
they may lose value. For more current information and month-end results, visit americanfunds.com.
Regular investing does not ensure a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining. Indexes are unmanaged and, therefore,
have no expenses. Results for the Lipper indexes do not reflect sales charges. There have been periods when the fund has lagged the index. While it is not possible to invest directly in an index, you can
invest in an index fund.
This illustration must be preceded or accompanied by the fund's current summary prospectus or prospectus, which details charges, expenses, investment objectives and operating policies. The American
Funds are distributed by American Funds Distributors, Inc.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The investment advisor for the Target Date Retirement Series is currently waiving its management fee
of 0.10%. After December 31, 2015, the advisor may modify or terminate the waiver, but only with fund board approval. From September 1, 2004, through December 31, 2008, the investment advisor to
the American Funds and the business manager for The Tax-Exempt Fund of Maryland, The Tax-Exempt Fund of Virginia and Washington Mutual Investors Fund waived a portion of their management
fees. The investment advisor has also reimbursed expenses for some funds and share classes. Investment results shown reflect the waiver and reimbursements, without which the results would have
been lower. The waiver may be adjusted or discontinued by the investment advisor, subject to any limitations in the fund's prospectus. The expense ratios are as of each fund's prospectus available at the
time of publication. The Target Date Retirement Series include the weighted average expenses of the underlying funds. Please see the fund's most recent prospectus for details.
Standardized Average Annual Total Returns for Quarter Ended 12/31/2015
Returns for periods of less than one year are not annualized
Inception Max. Initial Sales
Security Name
New Perspective Fund A (ANWPX)
Inception
Date
3/13/1973
Max. Initial Sales
Charge/CDSC
5.75% Front
1 Year
-0.71%
5 Years
7.71%
10 Years
6.87%
Since
Inception
12.08%
Gross Charges and Expenses
Fund Name
New Perspective Fund A (ANWPX)
Sales Charge
5.75%
Max CDSC
1.00%
Max Redem Fee
0.00%
Total Gross Operating Expense
0.75%
The fund does not assess redemption fees. However, shareholders redeeming shares may be subject to the fund's Purchase Blocking Policy as described in the prospectus.
© 2016 Thomson Reuters
Page 2 of 6
Hypothetical Illustration
Jeff Secord Business History.20160218
The illustration included herein does not reflect the effects of taxes in some or all of the investments.
If the results shown on the following pages do not reflect deduction of an initial sales charge (i.e. they are at net asset value), please note that they would have been lower if the sales charge
had been deducted.
Class A shares are subject to an up-front maximum sales charge (5.75% for equity and target date funds, 3.75% for most bond funds, and 2.50% for Intermediate Bond Fund of America,
Short-Term Bond Fund of America, American Funds Short-Term Tax-Exempt Bond Fund, and Limited Term Tax-Exempt Bond Fund of America). The sales charge declines for accounts and
aggregated investments ($25,000 for equity and target date funds, $100,000 for most bond funds, and $500,000 for Intermediate Bond Fund of America, Short Term Bond Fund of America,
American Funds Short-Term Tax-Exempt Bond Fund, and Limited Term Tax-Exempt Bond Fund of America). There is no initial sales charge on purchases of $1 million or more. A 1%
contingent deferred sales charge (CDSC) may be assessed if a redemption occurs within one year of purchase. Results on the following pages reflect deduction of the CDSC if the
investment is $1 million or more and a withdrawal is selected within one year of purchase. NAV for initial investments may apply in other situations. For additional details, please reference
the fund's Statutory Prospectus. Certain withdrawals before age 59 1/2 may be subject to income tax and, if applicable, to a 10% federal penalty. For current information and month-end
results, visit americanfunds.com.
Investing outside the United States involves additional risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be
heightened in connection with investments in developing countries.
•
The A/529-A share 1, 5, and 10-year return for each fund is based on the MOP value.
•
The "Average annual return on the investment" is based on the initial investment and the breakpoint chosen.
•
Cumulative Volume Discount Reflected Where Applicable in This Illustration.
•
NOTE: Systematic Accumulation Plans cannot assure a profit or protect against loss in declining markets.
© 2016 Thomson Reuters
Page 3 of 6
Hypothetical Illustration
Jeff Secord Business History.20160218
New Perspective Fund A (ANWPX)
Date
Initial
Investment
Initial
Sales
Charge
Net
Amount
Invested
Shares
Purchased
03/13/1973
$10,000.00
5.75%
$9,431
2,336.449
$10,000 initial investment on 03/13/1973. Dividends and capital gains are reinvested. The initial investment is subject to a 5.75% sales charge. The effects of income and capital gains taxes are not
demonstrated.
Total
Dividend
Income
Capital
Gains
Shares
Held
Total
Value
Date
Investment(s)
Dividend
Income
12/31/1973
10,000
186
186
0
2,379
9,878
12/31/1974
0
431
617
0
2,502
7,964
12/31/1975
0
334
950
0
2,579
11,276
12/31/1976
0
275
1,225
230
2,688
13,097
12/31/1977
0
310
1,535
575
2,888
13,347
12/31/1978
0
436
1,971
617
3,073
16,436
12/31/1979
0
436
2,407
55
3,155
20,853
12/31/1980
0
838
3,246
0
3,268
26,176
12/31/1981
0
1,615
4,861
2,444
3,857
26,729
12/31/1982
0
1,794
6,655
1,095
4,286
32,487
12/31/1983
0
1,166
7,820
2,600
4,740
40,144
12/31/1984
0
1,145
8,966
3,114
5,317
40,196
12/31/1985
0
1,124
10,090
3,658
5,932
53,979
12/31/1986
0
1,312
11,402
7,482
6,853
68,462
12/31/1987
0
1,653
13,054
7,872
7,857
77,703
12/31/1988
0
2,531
15,585
4,997
8,621
85,774
12/31/1989
0
2,515
18,100
8,787
9,660
107,997
12/31/1990
0
2,914
21,014
4,189
10,327
105,750
12/31/1991
0
2,699
23,714
2,083
10,745
129,691
12/31/1992
0
2,157
25,871
541
10,963
134,849
12/31/1993
0
2,311
28,182
4,081
11,407
171,226
12/31/1994
0
2,632
30,814
9,627
12,269
176,304
12/31/1995
0
3,818
34,632
7,398
12,963
212,326
© 2016 Thomson Reuters
Page 4 of 6
Hypothetical Illustration
Jeff Secord Business History.20160218
Total
Dividend
Income
Capital
Gains
Shares
Held
Total
Value
Date
Investment(s)
Dividend
Income
12/31/1996
0
4,295
38,926
8,865
13,705
249,014
12/31/1997
0
3,987
42,914
16,666
14,789
286,472
12/31/1998
0
3,856
46,770
23,342
16,035
368,002
12/31/1999
0
2,730
49,500
37,612
17,509
515,463
12/31/2000
0
3,414
52,914
54,278
19,881
478,141
12/31/2001
0
7,378
60,292
0
20,215
438,455
12/31/2002
0
3,376
63,668
0
20,403
368,062
12/31/2003
0
3,611
67,280
0
20,554
503,367
12/31/2004
0
5,282
72,562
0
20,750
575,178
12/31/2005
0
8,217
80,779
37,660
22,355
640,034
12/31/2006
0
11,155
91,934
45,985
24,171
767,189
12/31/2007
0
16,315
108,250
54,844
26,229
890,208
12/31/2008
0
14,452
122,702
41,468
29,312
553,402
12/31/2009
0
8,940
131,642
0
29,663
760,559
12/31/2010
0
8,602
140,244
0
29,965
857,599
12/31/2011
0
8,540
148,784
0
30,291
792,412
12/31/2012
0
10,026
158,810
0
30,614
956,987
12/31/2013
0
9,184
167,994
53,635
32,300
1,213,196
12/31/2014
0
7,429
175,423
73,967
34,521
1,252,427
12/31/2015
0
8,979
184,402
67,316
36,627
1,319,304
01/31/2016
0
0
184,402
0
36,627
1,233,963
Total
10,000
184,402
184,402
587,083
36,627
1,233,963
Average annual return on the investment for the period 03/13/1973 - 01/31/2016 : 11.88%
© 2016 Thomson Reuters
Page 5 of 6
Hypothetical Illustration
Jeff Secord Business History.20160218
Total Ending Amount: $1,233,963
3/13/1973 - 1/31/2016
New Perspective Fund A (ANWPX) : $10,000 initial investment on 03/13/1973. Dividends and capital gains are reinvested. The initial investment is subject to a 5.75% sales charge. The
effects of income and capital gains taxes are not demonstrated.
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
73
76
79
82
85
88
91
94
97
00
03
06
09
12
15
From Capital Gains (Ending value: $843,396)
From Income (Ending value: $311,853)
From Principal (Ending value: $78,715)
This graph must be accompanied by the underlying Hypo illustration(s).
© 2016 Thomson Reuters
Page 6 of 6