bgbehavior gap breakfast

THE WEALTH

MANAGEMENT

PARADOX

MYTH:

RISK GOES DOWN WITH TIME

1 10 15 20

YEARS

%

RANGE OF OUTCOMES(NARROWS OVER TIME)

1 10 15 20

YEARS

$RANGE OF OUTCOMES

(WIDENS OVER TIME)

WHICH ONE CAN YOU

EAT?

INVESTMENT VS.

INVESTOR(IS THERE A DIFFERENCE?)

INVESTMENT

AVERAGERETURN

GROWTHOF

$100

A B C

8.5 8.0 7.5

$117.30 $116.65 $115.50

INVESTMENT SEARCH RESULTS

INVESTMENT A B CSTARTING VALUE $1,000 $1,000 $1,000

RETURN % 15% 8% 5.0%

RETURN $ $150 $80 $50

YEAR 2

CONTRIBUTION $1,000 $1,000 $1,000STARTING VALUE $2,150 $2,080 $2,050

RETURN % 2% 8% 10%

RETURN $ $43 $166 $205

ENDING VALUE $2,193 $2,242 $2,255

AVERAGE RETURN 8.5% 8.0% 7.5%

WEALTH MANAGEMENT

(FINANCIAL PLANNING)

8.5%

MODELING REALITY

PERSONAL PENSION

RISK

CONTRIBUTIONS

WITHDRAWALS

ENDING VALUE

RETIREMENT DATE

60 MPH

CASE STUDY

1926

ALLOCATION CHOICESTOCK

%RETURN

%RISK%

GROWTH$100

#1 - RISK TOLERANCE 38% 8.29 9.55 58,505

#2 - AGE BASED 41% 8.42 14.43 64,172

#3 - STOCKS 100% 10.36 20.20 265,707

#4 - SUPERIOR SELECTION 38% 9.80 9.55 176,612

#5 - WEALTH MANAGER 38% 8.58 14.39 72,460

COPY OF FUTURE WALL STREET JOURNAL

ALLOCATION CHOICE INVESTMENT INVESTOR

RETURN RISK GROWTH$100

#1 - RISK TOLERANCE 8.29 9.55 58,505 BROKE @ 51

#2 - AGE BASED 8.42 14.43 64,172 BROKE @ 50

#3 - STOCKS 10.36 20.20 265,707 BROKE @ 55

#4 - SUPERIOR SELECTION 9.80 9.55 176,612 $1,072,678

#5 - WEALTH MANAGER 8.58 14.39 72,460 $4,878,522

RESULTS

?

THE

WAY

FORWARD

“DEMOCRACY IS THE WORST FORM OF GOVERNMENT EVER

CREATED BY THE MIND OF MAN...

EXCEPT FOR ALL THE OTHERS”

---CHURCHILL

FOLLOW MY RESEARCH AT:

WWW.BEHAVIORGAP.COM

A SPECIAL THANKS TO FINACEWARE AND DIMENSIONAL FUND ADVISORS FOR RESEARCH AND INSPIRATION