Question

Complete the following questions after reading the book If You Can: How Millennials Can Get Rich Slowly by William J Bernstein. Number each question answer corresponding to the assignment question. Answer all questions in full complete sentences.

After completing the reading, you will need to go to the AARP Retirement Calculator. (See question #7) Calculate your retirement readiness by including all relevant information about income, retirement savings and expected retirement date. Click the button to estimate your retirement. Assume you are paying into Social Security or you plan to collect Social Security in the future. Assume your income is currently $50,000 if you have no income. Compare your results with and without the 15% savings recommended by W. Bernstein. The Questions you must answer are below.

Essay Questions:

1. What investment strategy does Bernstein recommend for millennials? How does Bernstein recommend that millennials implement this strategy? What does he suggest young people do before starting a retirement account?

2. What types of funds does Bernstein recommend? Why does Bernstein recommend index funds over individual stocks and bonds? (If you don’t know what an index fund is look it up.)

3. Name the five books Bernstein recommends that young people read to learn more about the financial market. Which book are you most likely to read and why?

4. Why does Bernstein say it is difficult for young people to save?

5. What is the easiest way to start saving? What does Bernstein mean when he says “always max out the employer match”?  

6. What does Bernstein mean by expected real return? Explain the difference between real and nominal return. What return does he suggest you use considering the impact of inflation?

7. Why does Bernstein say “beware of monsters”? Who are the monsters and why is it important to stay clear of them?

8. Go to the AARP Retirement Calculator website. See www.aarp.org/work/retirement-planning/retirement_calculator.html Scroll down the page. Fill in the information assuming income of $50,000 per year if you do not have any income. Calculate your future retirement based on saving zero and saving the recommended amount recommended by Bernstein. What will you receive your first year of retirement under both scenarios? Include your expected Social Security payments if you will be eligible to collect.

9. Discuss the results. How well will you be prepared for your retirement based on saving and not saving?

10. Locate three Retirement funds that you might invest in at a financial investment firm and list the names, current price of the fund, minimum investment for an IRA or Roth IRA. Hint: IRA funds usually have a minimum investment of less than $5000. Be sure you are looking at retirement funds. (Hint: Financial Investment Firms: Vanguard Financial, Fidelity Investments, TD Ameritrade, Merrill Lynch, Morgan Stanley, Charles Schwarb, your local bank or Google a retirement investment firm. Why did you select these funds? Do you like risk or are you risk-averse? Explain.

11. Share this information with a peer, a parent, grandparent, a spouse or friend. What did they say about it?  

Answer 1

1 .AARP retirement calculator =$50000*15/100=Rs 7500

Social security is a federal program that provides income and health insurance to retired persons, the disabled, the poor, and other groups.

The types are retirement, disability, survivors and supplemental benefits.

a) Retirement Benefits. Retirement benefits are what typically come to mind when most people think of Social Security.

b) Disability Benefits.

c)Survivors Benefits.

d)Supplemental Security Income Benefits.

e)The Best Age to Start Collecting.

2. Bernstein recommend for millennials

The value of investments held by the Fund may increase or decrease in response to economic, and financial events (whether real, expected or perceived) in the U.S. and global markets. The value of equity securities is sensitive to stock market volatility. Investments in foreign instruments or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical, currency exchange rates or other conditions. In emerging countries, these risks may be more significant. Smaller companies are generally subject to greater price fluctuations, limited liquidity, higher transaction costs and higher investment risk than larger, more established companies. The Fund's exposure to derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other investments. Derivatives instruments can be highly volatile, result in leverage (which can increase both the risk and return potential of the Fund), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. The Fund is exposed to liquidity risk when trading volume, lack of a market maker or trading partner, large position size, market conditions, or legal restrictions impair its ability to sell particular investments or to sell them at advantageous market prices. No fund is a complete investment program and you may lose money investing in a fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.

If you are young, your greatest financial asset is time⁠—and compound interest. At this point in your life, your primary investment objective for your long-term savings should be growth. Investors in their 20s will have at least 40 years over which to accumulate retirement savings

3.Type of funds of berstein are

a) ndividual US Treasury bonds, manually laddered.

b) US Treasury bond mutual funds, for smaller balances.

c) Top-yielding FDIC-Insured Certificates of Deposit, manually laddered.

d) Short-term or intermediate-term, higher-quality municipal-bond funds, for large taxable balances.

Bernstein suggests investment funds because of the following factors which are as follows

Buying an index fund in 3 steps

1. Decide where to buy. Look at a broker's fund selection, commission-free options and trading costs.
2. Pick an index. Funds may track well-known indexes like the S&P 500 or specific industries or types of companies.
3. Check investment minimum and other costs.  

When buying individual stocks, you see reduced fees. You no longer have to pay the fund company an annual management fee for investing your assets. ... Since fees have a big impact on your return, this alone is a good reason to own individual stocks.

5 Books That Made Gabby Bernstein Who She Is

a)A Return to Love by Marianne Williamson.

b)Living in the Light by Shakti Gawain.

c)The Body Ecology Diet by Donna Gates.

d)How to Hear Your Angels by Doreen Virtue.

e) Secrets of Manifesting by Dr. Wayne Dyer.

6. Personal finance guru William Bernstein says young workers had better start saving. He's advocating an investment strategy that he says will take 15 minutes of work per year and outperform 90 percent of finance professionals in the long run.

7. Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recurring costs.

8.Here are eight ways on how to start saving and get into the savings habit:

1. Pay off your debts first. ...
2. Start small. ...
3. Separate your savings. ...
4. Earn interest on your money. ...
5. Build a savings cushion. ...
6. Set up a standing order. ...
7. Pay in after pay day. ...
8. Set a savings goal. For some 401(k) plans, employers can match some percentage of their employees' contributions, but it's strictly voluntary. ... The total contribution to a 401(k) plan from both employer and employee cannot exceed $57,000 for 2020 ($56,000 for 2019), or $63,500 for those aged 50 or older ($62,000 for 2019).