August 11


Pop Quiz: Don’t Cheat

Our home is always bustling. We have four children, aged 11, 13, 15, and 17. Our animal family includes three cats and a dog: two Ragdolls, one rescue cat, and a mini Goldendoodle.

Here's some more exciting news: we've added another puppy to our mix! Yes, it sounds a bit wild.

Her name is Penny, and she's Desmond's half-sister. While Desmond is more attached to my wife, Penny is my little companion. I've had a few sleepless nights with her, but she's stolen my heart already.

Desmond has been a patient older brother, even when Penny playfully bites his ears. The cats? Well, they're still deciding how they feel about our newest member.

It’s quiz time. For those of you who faithfully read my weekly articles, you should do great.

Note: The answers follow each question. No cheating! I was trying to figure out how to make sure you don’t peek at the answer by mistake. So ... I tried to be creative. You will see what I mean below.

1. What did the stock market return the 12 months after the bottom of the 2008 real estate and stock market crash?

A. -30 percent
B. +5 percent
C. -10 percent
D. +49 percent

Answer: One letter after C (otherwise known as D)

2. What did the stock market return, per year, in the 1990s?

A. 5 percent
B. 18 percent
C. 1 percent
D. 10 percent

Answer: Two letters before D

3. What is the average return for stocks from 1800-1900 (accounting for inflation)?

A. 5 percent
B. 3 percent
C. 10 percent
D. 0 percent

Answer: One letter before D

4. What is the average return for stocks from 1900-2000?

A. 4 percent
B. 10 percent
C. 0 percent
D. 12 percent

Answer: Two letters before D

5. At what age should most people stop investing in stocks and bonds?

A. 60
B. 70
C. 80
D. 90
E. Never

Answer: One letter after D

6. How often do "most economists" predict a recession?

A. Every ten years
B. Every five years
C. Every three years
D. Every year.  For 21 years, every year, I've seen the same fear-based rhetoric.

Answer: One letter after C

7. Why do many money managers hesitate to encourage clients to spend?

A. They don’t want them to run out of money.
B. Portfolios perform better when you don’t take out any money.
C. They get paid based on how much money is in the account.
D. They are jealous of all the fun you have with the money.

Answer: One letter after B

8. How much should I watch the financial news to be informed enough to make good investment decisions?

A. One hour a day.
B. Never.
C. A few minutes here and there.
D. One hour a week.

Answer: One letter before C

9. How much more money do you receive for every year you wait to collect social security?

A. 5 percent
B. 0 percent
C. 6 percent
D. 8 percent

Answer: Two letters after B

10. When will social security go bankrupt?

A. In the next ten years
B. Not in your lifetime
C. In 20-30 years
D. In 10-20 years

Answer: One letter before C

11. On average, how much less do people spend in their late seventies than they did in their late forties?

A. The same
B. 10 percent less
C. 40 percent less
D. 18 percent less

Answer: Two letters after A

12. When does using some of your 401(k) to pay off your mortgage make sense?

A. If you are about to retire.
B. Never.
C. If it would make you feel better and more secure.
D. If interest rates are above 7%.

Answer: One letter after A

13. You are getting $2,000 a month in Social Security. Your spouse is getting $2,500. If your spouse were to die, how much money would you continue to receive?

A. $2,000
B. $4,500
C. $2,500
D. $2,250

Answer: One letter before D

14. How many retirees are dying with more money than they’ve ever had before?

A. 5 percent
B. 33 percent
C. 0 percent
D. 50 percent

Answer: Two letters before D

15. How many Americans who are retiring now can maintain their standard of living?

A. 48 percent
B. 0 percent
C. 74 percent
D. 15 percent

Answer: One letter before B

16. Which of the following steps is NOT a part of successful retirement planning?

A. Create a budget.
B. Invest your savings in a diversified portfolio of stocks and bonds with at least half the money in stocks.
C. Spend 5 percent of the account value each year.
D. Use the money! The 5 percent withdrawal, historically speaking, has never led to someone running out of money.
E. Use sophisticated stock trading software.

Answer: One letter after D

17. Why is skilled retirement planning so awesome?

A. It helps you spend the perfect balance between too much and too little.
B. It reduces worry and increases the fun!
C. It gives you the financial rules and parameters by which you can live your retired life.
D. It harnesses the incredible power of diversified portfolios of stocks and bonds.
E. It might help you to spend more and worry less.

Answer: All of the above

How did you do? Share this with friends to see if they can do any better.
Be Blessed,

Retiring soon?  Let me know if you have questions.
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